Does aid cause conflict in Pakistan?

This study provides evidence from Pakistan on how the delegated task of achieving strategic objectives of the donor can lead to incompatibility of aid objectives which then generates perpetual and multidimensional domestic conflict in the recipient society. We use count data method to estimate the relationship between aid and conflict. At the aggregate level, social sector spending, regime change and youth bulge are positively and significantly related with conflict. However, aid per capita gives ambiguous results. It is significant with conflict count in the terrorism data-set and insignificant for data on armed conflict. Inclusion of youth bulge and unemployment rate confirms the marginalization hypothesis of conflict. Inflation rate and the tax variables are insignificant. This confirms that aid erodes fiscal capacity. At project-level data, conflict is strongly related with aid commitment and purpose. Discrepancy in aid allocation and commitment may accentuate conflict.     

Military Expenditure,Economic Growth and Heterogeneity

This paper examines the impact of military expenditure on economic growth on a large balanced panel, using an exogenous growth model and dynamic panel data methods for 106 countries over the period 1988–2010. A major focus of the paper is to consider the possibility group heterogeneity and non-linearity. Having estimated the model for all of the countries in the panel and finding that military burden has a negative effect on growth in the short and long run, the panel is broken down into various groupings based upon a range of potentially relevant factors, and the robustness of the results is evaluated. The factors considered are different levels of income, conflict experience, natural resources abundance, openness and aid. The estimates for the different groups are remarkably consistent with those for the whole panel, providing strong support for the argument that military spending has adverse effects on growth. There are, however, some intriguing results that suggest that for certain types of countries military spending has no significant effect on growth.     

INTRA‐GROUP COMPETITION AND INTER‐GROUP CONFLICT: AN APPLICATION TO NORTHERN IRELAND

This paper reviews four economic theories of leadership selection in conflict settings. The ‘credibility rationale’, argues that hawks may actually be necessary to initiate peace agreements. The ‘bargaining rationale’ predicts that while doves are more likely to secure peace, post‐conflict hawks may be rationally selected. The ‘social psychological rationale’ captures the idea of a competition over which group can form the strongest identity. Dove selection can be predicted during conflict, but hawk selection post‐conflict. Finally, the ‘expressive rationale’ predicts that regardless of the underlying nature of the game the large group nature of decision‐making in rendering individual decision makers non‐decisive in determining the outcome of elections may cause them to make choices based primarily on emotions. Finally, the paper analyses the extent to which the theories can throw light on Northern Ireland electoral history over the last 25 years.     

Property distribution and configurations of sovereign states: A rational economic model

A nation's wealth is both an object of conquest to covetous aggressors and a resource to its owners for self defense. To maintain autonomy every country must mount a defense which either makes its capture (1) more expensive than any aggressor can afford, or (2) more expensive than it is worth to aggressors. Whether this condition can be satisfied for all countries simultaneously depends as shown in this paper on relative efficacy of military offense versus defense, the aggregate of wealth among nations and its distribution, and the benefits a conqueror may obtain from conquest, including the duration of these benefits. The paper shows how these factors fit together to determine the sustainability and stability of the international distribution of property as embodied in the configuration of sovereign states.     

The structure of defense production in the United States, 1929‐∗

This article contains a critical review of the literature on the economics of military affairs in Greece and Turkey as of December 1999. In particular, I review (a) arms race models; (b) models of the demand for military expenditure; (c) models measuring the economic impact of military expenditure; and (d) literature and issues related to indigenous arms production. I conclude with a number of summary lessons and observations of how future research might improve upon the existing body of work.     

Strategic defense and attack for series and parallel reliability systems: reply 1 to comment 1

Kovenock and Roberson's [2011] comment provides initial work which has the potential, when suitably extended, to advance the research frontier. Kovenock and Roberson's paper consists of three sections. The first section is an interesting introduction. The second section, titled ‘Model and Main Result,’ provides no contribution beyond Hausken [2008a]. It consists of Equations (1)–(10) which are equivalent to equations developed by Hausken, and Equation (11) which is equivalent to the utility requirements u???0 and U???0 provided after Equation (17) in Hausken. The third section provides interesting ideas about mixed-strategy equilibria that can be extended in future research.     

Armed Conflict,Military Expenses and FDI Inflow to Developing Countries

This paper investigates the relationship between military expenditure and FDI inflow conditioning on the exposure of a country to armed conflict in the long run. We apply the band spectrum regression estimator, and the maximal overlap discrete wavelet transform, to a panel of 60 developing countries, for the years 1990 to 2013. The estimated results indicate that military expenditure, in the absence of armed conflict, reduces FDI inflow. However, the negative effect is mitigated by increased military expenditure, in the presence of armed conflict. We also show that the effect of military expenditure on FDI is time sensitive, in that it takes time for military expenditure to affect FDI inflow. FDI inflow in response to higher military expenditure is higher for the country that faces higher armed conflict than the country that faces lower armed conflict. The findings are robust in the case of overall as well as internal conflict. These results are also robust to the alternative specification, subsample analysis with different armed conflict thresholds, and the estimation using the time variant long-run models.     

Forced displacement and behavioral change: an empirical study of returnee households in the Nuba Mountains

We use a unique data-set gathered during a short-lived interwar period in the Nuba Mountains of Sudan to compare characteristics of the households returning after the conflict with those that stayed in their communities of origin. We found that returning households seemed to face worse economic conditions, particularly in the case of female-headed returnee households. Nevertheless, our results show that returnees tend to perform better on different health indicators. Using a detailed set of variables about hygiene and sanitary habits, we explore the hypothesis that the latter result may be related to changes in attitudes given the distinct experiences during displacement. We show that returnees are indeed more likely to adopt these measures.     

RAIN,GROWTH, AND CIVIL WAR: THE IMPORTANCE OF LOCATION

We re‐examine the Miguel et al. (2004 Miguel, E., Satyanath, S. and Sergenti, E. 2004. Economic shocks and civil conflict: an instrumental variables approach. Journal of Political Economy, 112(4): 725–753. [Crossref], [Web of Science ®] , [Google Scholar]) study of the impact of growth on civil war, using growth in rainfall as an instrument. Miguel et al. (2004 Miguel, E., Satyanath, S. and Sergenti, E. 2004. Economic shocks and civil conflict: an instrumental variables approach. Journal of Political Economy, 112(4): 725–753. [Crossref], [Web of Science ®] , [Google Scholar]) – in our view, erroneously – include countries participating in civil wars in other states. Restricting the conflict data to states with conflict on their own territory reduces the estimated impact of economic growth on civil war. We show how spatial correlations in rainfall growth and participation in civil conflicts induce a stronger apparent relationship in the mis‐classified data.     

Book reviews

This paper defines the global economic costs of conflict and suggests two key criteria, namely comprehensiveness and consistency, which are necessary for a valid calculation of such costs. A critical review of the literature reveals that most studies focus on national income losses, using counterfactual regression models, finding a negative impact on growth both for conflict countries themselves and for their neighbors. However, the debate is quite fragmented and the literature fails to combine these insights in a comprehensive and consistent manner. Furthermore, there is little work thus far on integrating aggregate and micro‐level estimates of the costs of conflict.