Trading Away from Conflict : Using Trade to Increase Resilience in Fragile States

While economic growth in developing countries over the last ten years has lifted more people out of poverty than in any previous time, more than one billion people still live in countries affected by violent conflict. Conflict weakens governance, u...

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Bibliographic Details
Main Author:	Cali, Massimiliano
Format:	Publication
Language:	English en_US
Published:	Washington, DC: World Bank 2014
Subjects:	ACCESS TO FOREIGN MARKETS AGRICULTURAL COMMODITIES AGRICULTURAL PRICES AGRICULTURAL PRODUCTS AGRICULTURE ARMED CONFLICT BALANCE OF POWER BANK ACCOUNT BARRIERS TO TRADE BATTLE BILATERAL TRADE BOUNDARIES CHANGES IN TRADE CIVIL WAR COFFEE PRICES COMMERCE COMMERCIAL POLICY COMMODITIES COMMODITY COMMODITY EXPORT COMMODITY EXPORTS COMMODITY PRICE COMMODITY PRICES COMPETITIVENESS CONCESSIONS CONFLICT CONFLICTS CONNECTIVITY CONSUMERS COTTON PRICES COUNTRY DUMMY CRISES DEATHS DEMAND SHOCKS DEPENDENCE DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT ASSISTANCE DEVELOPMENT ECONOMICS DIVIDEND DIVIDEND PAYMENTS DOLLAR VALUE DOMESTIC MARKET DOMESTIC MARKETS DOMESTIC PRICE DOMESTIC PRICES DOMESTIC PRODUCERS DOMESTIC PRODUCTION ECONOMIC DEVELOPMENT ECONOMIC DEVELOPMENTS ECONOMIC DOWNTURNS ECONOMIC GEOGRAPHY ECONOMIC INEQUALITIES ECONOMIC INEQUALITY ECONOMIC POLICY ECONOMIC RELATIONS ECONOMIC RESOURCES ECONOMIC THEORY ECONOMICS LITERATURE EMBASSY EXOGENOUS SHOCKS EXPENDITURE EXPLOITATION EXPORT DIVERSIFICATION EXPORT GROWTH EXPORT MARKETS EXPORT PRICE EXPORT PRICES EXPORT SECTOR EXTERNAL SHOCKS EXTERNAL TRADE FIGHTING FINANCIAL SECTORS FOOD PRICE FOOD PRICES FOOD SECURITY FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN INVESTMENT FOREIGN MARKET FOREIGN MARKETS FOREIGN POLICY FOREIGN SUPPLIERS FUTURE RESEARCH GDP GDP PER CAPITA GENERAL EQUILIBRIUM MODEL GROUPS OF COMMODITIES IMPACT OF TRADE IMPORT PRICES INCOME INCOME GROUP INCOME LEVELS INCOMES INSTITUTIONAL CAPACITY INTEREST RATE INTEREST RATES INTERNATIONAL BANK INTERNATIONAL COMMUNITY INTERNATIONAL DEVELOPMENT INTERNATIONAL MARKETS INTERNATIONAL ORGANIZATIONS INTERNATIONAL PRICES INTERNATIONAL STUDIES LIBERALIZATION LOW-INCOME COUNTRIES MACROECONOMICS MARGINAL EFFECTS MARKET ACCESS MEETING MERCHANDISE MERCHANDISE EXPORTS NATIONAL ECONOMY NET EXPORTERS OIL PRICE OIL PRICES OIL REVENUES OPPORTUNITY COST PEACE PER CAPITA INCOME POLITICAL STABILITY POLITICAL UNREST POLITICAL VIOLENCE PREFERENTIAL ACCESS PRICE CHANGES PRICE FLUCTUATIONS PRICE INDEX PRICE INDICES PRICE LEVEL PRICE SUBSIDIES PRICE VOLATILITY PUBLIC FUNDS REAL INCOME REBEL REBELS RECONSTRUCTION REFUGEES REGIONAL CONFLICTS REGIONAL TRADE REGIONAL TRADE AGREEMENTS RULE OF LAW SALES SUSTAINABLE GROWTH TAX TAXATION TECHNICAL ASSISTANCE TERMS OF TRADE TRADE AGREEMENT TRADE AGREEMENTS TRADE COMPETITIVENESS TRADE FACILITATION TRADE FLOWS TRADE INTEGRATION TRADE LIBERALIZATION TRADE POLICIES TRADE POLICY TRADE PROTECTION TRADE RELATIONS TRADE SHOCKS TRADE VARIABLES TRANSPARENCY TRANSPARENCY INITIATIVE TRANSPARENCY INITIATIVES UNEMPLOYMENT UNEMPLOYMENT RATES VALUE OF EXPORTS VIOLENCE VOLATILITY VOLUME OF TRADE WAGES WARS WEALTH WORLD DEVELOPMENT WORLD DEVELOPMENT INDICATORS
Online Access:	http://documents.worldbank.org/curated/en/2014/12/23010200/trading-away-conflict-using-trade-increase-resilience-fragile-states http://hdl.handle.net/10986/20713

Description
Summary:	While economic growth in developing countries over the last ten years has lifted more people out of poverty than in any previous time, more than one billion people still live in countries affected by violent conflict. Conflict weakens governance, undermines economic development and threatens both national and regional stability. Trade shocks, in particular, can have widely varying impacts on conflict. This report sets out to empirically test these linkages between trade shocks and conflict via cross-country and intra-country analysis. On the basis of the analysis, it offers trade-related policy directions to reduce this risk in fragile economies. The results provide convincing evidence that trade and trade policy have a large impact on the risk and intensity of conflict. This report is composed of three main chapters. Chapter 1 develops a conceptual framework mapping the different channels through which trade may affect conflict and political stability. The framework is based on simple economic theory and the available empirical evidence on the impact of trade related changes on conflict and stability. It then tests this framework empirically through the analysis of cross-country data and through case studies of Nigeria and the Israeli-Palestinian conflict. The hope is that these types of intra-country analyses could be replicated in other countries, since they use data that are available in different countries, especially in sub-Saharan Africa. Chapter 2 uses the same conceptual framework to show how differences in underlying conditions affect the relationship between trade-related changes and conflict. Following a review of the literature on the drivers of conflict, it examines the importance of four groups of grievances: conditions in neighboring countries, factors increasing grievance, government institutions, and policies that affect the transmission of changes in international prices to the domestic market. These relationships are tested using cross-country data and case studies of Nigeria and the Israeli-Palestinian conflict. Finally, chapter 3 uses the existing evidence, as well as evidence generated in this report, to discuss how the policies governing trade can reduce the probability and intensity of conflicts. Two appendixes include detailed information on the modeling framework, the data issues and the estimation results.

Trading Away from Conflict : Using Trade to Increase Resilience in Fragile States

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