The economic cost of conflict: Evidence from South Sudan

Abstract

This study estimates the output loss in South Sudan as a result of the double shock of the protracted post-independence conflict and macroeconomic crisis. Using the synthetic control method for comparative studies, the analysis suggests that the cumulative loss in the growth rate of real per-capita gross domestic product (GDP) was 69.63% (or a yearly average of 15.65%) over the period 2012-2018.

Years of life lost to revolution and war in Iran

“…2 Jervis (2011, p. 16) points out that the revolutionary protests began in 1977, initiated by the secular opposition rather than the groups that eventually toppled the Shah. 3 The SCM has been used in different contexts including development effects of conflicts, revolutions, and populism (Abadie & Gardeazabal, 2003;Echevarría & García-Enríquez, 2020;Farzanegan, 2022aFarzanegan, , 2022bFarzanegan & Kadivar, 2023;Grier & Maynard, 2016;Jales et al, 2018;Lawson et al, 2019;Matta et al, 2022;Mawejje & McSharry, 2021), among others. Farzanegan & Batmanghelidj (2023) explain how the SCM can be used to measure the socio economic effects of sanctions, providing examples from Iran.…”

The fiscal effects of armed conflicts in Africa

“…The conventional school of thought is that the persistence of armed conflicts and insurgences makes socioeconomic space ungovernable and brings about the shirking of fiscal space (Gupta et al, 2004). This effect can be directly or indirectly through specific macroeconomic channels such as a decline in national output, investments, and income (Mawejje & McSharry, 2021). In the case of South Sudan, for instance, Mawejje and McSharry (2021) demonstrated how conflict significantly undermined the rate of exports and investment and by extension, government fiscal capacity.…”

“…This effect can be directly or indirectly through specific macroeconomic channels such as a decline in national output, investments, and income (Mawejje & McSharry, 2021). In the case of South Sudan, for instance, Mawejje and McSharry (2021) demonstrated how conflict significantly undermined the rate of exports and investment and by extension, government fiscal capacity. Indirectly, therefore, armed conflicts affect the fiscal capacity of the state by bringing about a reduction in industrial capacity utilisation, distortion in the flows of investment and businesses, displacement of the economically active population, and narrowing the fiscal space for tax revenue (Frynas & Buur, 2020).…”