Civil Wars and Economic Growth in Sub-Saharan Africa1

Abstract

This paper uses panel data from a sample of Sub-Saharan African (SSA) countries over the 1960–96 period and both Instrumental Variables (IV) and dynamic panel data (DPD98) estimator to investigate the effect of the incidence and severity of civil war on the growth rate of per capita income. We find that both factors have a robust, negative and statistically significant effect on the growth rate of per capita income. We find that civil war affects the growth rate of income partly through reduced investment in physical capital. However, if one does not control for the correlation between civil war incidence and other growth factors, the estimated effect of civil war on economic growth is not robust. We are unable to find any significant relationship between the level of income and the incidence of civil war in SSA countries after controlling for other variables that are correlated with income levels.