Lake Chad Regional Economic Memorandum : Technical Paper 3. Estimating the Spillover Economic Effects of Foreign Conflict - Evidence from Boko Haram
Violent conflicts present a formidable threat to regional economies. Throughout the world, border regions in many countries are possibly impacted by the cross-border economic effects of regional insurgencies in neighboring countries or national sta...
| Main Authors: | , , , |
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| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/undefined/168241636640474130/Technical-Paper-3-Estimating-the-Spillover-Economic-Effects-of-Foreign-Conflict-Evidence-from-Boko-Haram http://hdl.handle.net/10986/36574 |
| Summary: | Violent conflicts present a
formidable threat to regional economies. Throughout the
world, border regions in many countries are possibly
impacted by the cross-border economic effects of regional
insurgencies in neighboring countries or national state
failures, i.e. "bad neighbors". This raises two
questions. First, what is the magnitude of the spill-over
economic effects of foreign conflict and what are the
channels through which they operate Second, what policies
can governments adopt in the potentially exposed regions to
mitigate such spill-over effects. In this paper, we adopt a
difference-in-difference (DiD) framework leveraging the
unexpected rise of the Boko Haram insurgency in Northeastern
Nigeria in 2009 to study its economic effects in neighboring
areas in Cameroon, Chad and Niger that were not directly
targeted by Boko Haram activities. We find strong
cross-border economic effects that are likely driven by
reduced trade activities, not the diffusion of conflict.
Factors of local economic resilience to this foreign
conflict shock then include trade diversification and
political and economic securitization. More generally,
conflicts, if they have regional economic effects, may
necessitate regional responses. |
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