Can democracy save Kenya from civil war?

As thousands of opposition protestors marched on the streets of the Kenyan capital, Nairobi in January, and hundreds died in internecine skirmishes, the rest of the world held its breath, anxious that one of Africa's democracies was about to descend into violent conflict.

The risk of outright war seems to have been averted for now, but the outbreak of violence was a reminder that civil war is an ever-present threat for many post-colonial states. Civil wars are bloody and debilitating, and can trap developing countries in a spiral of poverty and war, as competing factions scrap over resources, and destitute youths with few alternatives are pressed into serving as soldiers.

Because of their devastating impact on fragile countries, determining what causes civil wars to break out has become a key theme of development economics. One simple answer is poverty, and a number of studies have shown a connection between weak economic growth and armed conflict. New CEPR research shows, however, that tough economic times are not equally likely to sweep all countries into an outbreak of internecine bloodletting - democratic institutions can act as a barrier against civil war. CEPR Researcher Antonio Ciccone and co-author Markus Brückner focus on Sub-Saharan Africa, where civil conflicts have been rife in the past two decades.

Simply examining the connection between economic growth and civil wars directly is not enough, because it is difficult to disentangle cause and effect. When a conflict is brewing, it may also depress investment, entrepreneurial activity and so on; and there may be common economic and social factors which - at the same time - make the outbreak of civil war likely; and put downward pressure on the economy.

To avoid these methodological pitfalls, the authors exploit a key factor in determining the performance of Sub-Saharan Africa's economies - international commodity prices. Since many of these developing countries are heavily dependent on exporting raw materials, a shift in commodity prices has a strong effect on their economy. Since commodity prices are largely determined on the global market, however, they cannot be confused with the causes of civil conflict at home.

Thus, the authors use the International Monetary Fund's indices of international commodity prices to construct a specific price index for each country over the period they study, based on which particular resources it exports and in what proportions. They test their indices to see whether they are a good proxy for income growth, and find that in general, a 10 percentage point increase in commodity prices increases income growth by 0.43 percentage points.

To measure the prevalence of civil wars, the authors use the findings of a comprehensive Swedish project, which aims to record systematically every incidence of civil conflict throughout the world. The Uppsala Conflict Data Program tracks the outbreak of civil conflicts (which they define as involving at least 25 deaths) and civil wars (involving at least 1,000 deaths), and Bruckner and Ciccone are able to use the 2007 dataset from this project to provide information about which Sub-Saharan African countries have been engaged in civil wars since the 1980s.

Initially, when they carry out an instrumental variable regression to test the connection between civil conflict and commodity price growth, they find that there is no statistically significant connection - in other words, it appears that weak economic growth (as indicated by weak international commodity prices) does not cause civil conflict.

However, the authors then test whether the presence of democracy makes any difference to the effects of commodity prices and civil war. As a measure of how democratic a country is, they use the Polity IV database, produced by a team of US academics. It examines how freely the public can exercise control over their rulers - whether there are checks and balances on rulers; and whether the population can freely exercise their democratic and civil rights. The researchers assign each country a score from -10 to +10 and then use these scores to give each country either a 1, if it is democratic; or a 0, if it is not.

When they separate their results into two groups - the democratic and the undemocratic countries - a much stronger, and more interesting pattern emerges. For undemocratic countries, there is a strong connection between commodity prices (and hence economic growth) and domestic conflict. Where raw materials are cheap, and the economy is suffering accordingly, it is more likely that a civil war ensues. For those countries that score a 1 for democracy, the influence of lower commodity prices is much weaker - in fact, too weak to be statistically significant.

In other words, although it is true that a deterioration in the economic climate tends to make a civil war more likely, the link is much stronger in countries with an autocratic regime. In general, a 5 percentage point fall in income growth tends to increase the likelihood of civil war by 8%, in non-democracies. But where democracy exists it seems to act to dampen the impact of economic weakness.

The authors check their results using a second measure of democracy - the assessment of a country's liberty produced by US think-tank Freedom House - and reproduce the same finding. Although in general, weaker income growth tends to spark outbreaks of violent unrest, perhaps as fresh groups exploit high unemployment and the desperation of poverty to make a grab for power, democratic institutions seem to act as a block.

They also try out a series of alternative factors to see whether they seem to have a similar role in checking the outbreak of civil war, including whether the country has been a British colony in the past, or has inherited the British legal system (both of which have been identified as causes of stronger economic growth); ethnic fractionalisation; and the presence of political and institutional checks and balances on power. However, only democracy seems to have a special role in helping to contain the damage wrought by weak economic growth.

These new findings help to confirm that securing long-term, stable economic growth is important to helping countries to escape from the trap of poverty and the repeated slide towards civil conflict; but they also provide some comfort to those who fear that poverty and civil war are inextricably bound together.

Economist Paul Collier, in his recent book The Bottom Billion, argued that rich nations should offer to underpin the security of democratically-established governments in developing countries, by sending in troops where necessary, to prevent them from sliding repeatedly into conflict. Bruckner and Ciccone's findings suggest that democracy itself can act as a bulwark against civil war.

DP 6568 Growth, Democracy and Civil War

Markus Bruckner and Antonio Ciccone