Conflict, Growth, and Poverty in Guinea-Bissau

Conflicts and political instability have been serious constraints to growth in Guinea-Bissau. Of special concern was the civil war of 1998, which lasted 11 months and led to substantial loss of life as well as to a massive decrease in GDP per capita. Based on research on the economic cost of conflicts in Sub-Saharan Africa conducted by Lopez and Wodon (2005) and using a technique to identify outliers in time series and to correct the series for such outliers, this chapter estimates that GDP per capita today could have been more than 40 percent higher if there had been no conflict in 1998. In turn, one in three persons living in poverty today might not be poor had it not been for the conflict