Institutional determinants of internal conflicts in fragile developing countries

Abstract

In this article, we use fixed-effect Poisson regressions (FEPR) with robust standard errors and instrumental variables (IV) to study the economic, social, and institutional determinants of internal conflicts in 58 fragile developing countries from 2004 to 2017. We show that effective institutions (measured by judicial efficiency and governance) and higher incomes could help reduce conflict in fragile countries. In contrast, trade reform does not seem to reduce violence, and education and democratic institutions may fuel conflict in some cases. These results imply that education and trade liberalization do not have the expected effects in fragile countries, which should probably first improve their social, economic, and institutional situation, before reaping the benefits of economic reforms and education. This may also be the case for political reforms, because democratic experience seems to lead to increased violence in some countries in our sample.