Post-Conflict Recovery: Institutions, Aid, or Luck?
IMF Working Papers, June 1, 2011
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Bibliographic details
- Authors: Antonio David, Fabiano Rodrigues Rodrigues Bastos, Marshall Mills
- Published: June 1, 2011
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781455269471.001
Summary findings
- Study scope: analyzes cross-country differentials in growth performance in the aftermath of social conflict for 30 sub-Saharan African countries using panel data techniques.
- Most important correlate: changes in the terms of trade are the most important correlate of economic performance in post-conflict environments.
- Magnitude: changes in the terms of trade are typically associated with an increase in the marginal probability of positive economic performance by about 30 percent.
- Secondary importance: institutional quality emerges as the second most important factor.
- Limited impact of aid: foreign aid has very limited ability to explain differentials in growth performance.
- Non-significant policy variables: other policy variables such as trade openness are not found to have a statistically significant effect.
- Interpretation: results suggest that exogenous factors ("luck") are an important factor in post-conflict recovery.
Methodology
- Empirical approach: panel data techniques applied to a sample of 30 sub-Saharan African countries in post-conflict settings.
Key statistics and metadata (preserve exact values)
- Sample size: 30 sub-Saharan African countries
- Effect size: increase in the marginal probability of positive economic performance by about 30 percent
- Pages: 33
- Publication date: June 1, 2011
- Series: Working Paper No. 2011/149
- Issue: 149
- Volume: 2011
- DOI: https://doi.org/10.5089/9781455269471.001
- ISBN: 9781455269471
- ISSN: 1018-5941
Policy implications and recommendations
- Mitigate terms-of-trade volatility:
- Implement countercyclical macroeconomic policies to cushion macroeconomic impact of terms of trade volatility.
- Develop innovative financing instruments to manage terms-of-trade shocks.
- Promote export diversification to reduce vulnerability to terms-of-trade movements.
- Strengthen institutional quality as a key supportive factor for recovery.
- Recognize limits of foreign aid in explaining growth differentials and prioritize policies that address exogenous shocks and institutional frameworks.
Conclusion
- Post-conflict recovery outcomes are strongly influenced by exogenous terms-of-trade movements and institutional quality, while foreign aid and trade openness show limited explanatory power for cross-country differences in growth performance in the studied sample.
Source: IMF Working Paper “Post-Conflict Recovery: Institutions, Aid, or Luck?”, June 1, 2011.