The impact of armed conflict on economic performance: evidence from Rwanda

Important gaps remain in our understanding of the economic consequences of civil war. The most promising way forward to address these gaps is to carry out micro-economic analysis, as underlined by Blattmand and Miguel(2010)in their recent JEL review. This paper studies the effect of mass killings and human capital destruction on economic performance in Rwanda. Combining rich household data with unique local data on violence in Rwanda, we investigate the effect of conflict on economic performance at the household and community levels six years after the conflict. We find that households and localities that experienced more intensive conflict are lagging behind in terms of per capita consumption. This finding is robust to taking into account the endogeneity of violence. Comparing returns to factors of production between zones that experienced low and high intensive conflict, we find significantly different returns to land and labor, shedding light on the differences in catch up. Distinguishing between civil war and genocide, the results indicate that the returns to production factors depend on the form of violence and the type of capital destroyed, and catch up is slower in the case of human capital destruction.status: publishe