The Economics of Conflict and Peace

This essay takes stock of the existing literature in economics on the costs, consequences and causes of armed conflicts. The existing literature has put a particular focus, among others, on the impact of ethnic diversity, natural resource abundance and high poverty levels on the likelihood of conflict. Drawing on this, the current essay highlights several broad emerging trends in this literature. First of all, more and more papers use newly created, very fine-grained data. Second, there is a trend towards linking more closely the empirical analysis to underlying theoretical frameworks. Third, there is a growing awareness of the importance of being policy relevant. Studying the impact of particular policies and institutions is likely to take a more central importance in this literature in the coming years