DP20795 Agricultural Prices and the Onset of Civil War
Many studies find that increases in agricultural prices reduce armed civil conflict in producing regions. However, the effect on the onset of the most lethal conflicts—civil wars—remains unclear. I identify three methods of constructing commodity price indices in the literature and employ all three to estimate the effect of international agricultural price shocks on civil war onset using a global panel of 118 countries over the 1957-2007 period. The first method, where the price index is constructed based on a basket of agricultural commodities with country-specific commodity weights fixed over time, shows that increases in agricultural prices reduced civil war onset in the global sample, with stronger effects after 1980 and in Sub-Saharan Africa. The second method, where the price index is based solely on each country’s principal agricultural export, shows that increases in agricultural prices reduced civil war onset in the global sample over 1980-2007, again with stronger effects in Sub-Saharan Africa. The third method, where the price index is based on an agricultural commodity basket with time-varying commodity weights, yields estimates that are not statistically significant at conventional levels. Effect sizes are largest with the fixed-weight basket index. Thus, conclusions depend on how the price index is constructed. Evidence from the fixed-weight basket index—designed to isolate price effects—indicates that increases in international agricultural prices reduced the risk of civil war onset globally between 1957 and 2007.
