War! What is it Good For?

Whatever gains may come from fighting wars, economic growth is not among them.  This paper examines the long-run impact of interstate conflict on real GDP per capita for a cross section of countries between 1960 and 2000.  The authors construct a fatality-weighted conflict variable that accounts for both the severity and endogeneity of individual confrontations.  The model developed includes the authors' conflict measure in a deep determinants income regression in which we control for trade, institutions and geography.  The paper finds that a 10 percent increase in fatality-weighted conflict over the period 1960 to 2000 results in an average decrease of 1.2 to 1.6 percent in 2000 real GDP per capita.

This working paper has since been published. Find the journal article at the Berkeley Electronic Press.