Economic, Social, and Institutional Determinants of Domestic Conflict in Fragile States

Economic Research Forum (ERF) Working Papers Series, N. 27_64, CairoIn this article, we use Poisson fixed-effect regressions (FEPR) with robust standard errors and instrumental variables (IV) to study the economic, social and institutional determinants of internal conflicts in 58 fragile states over the period 2004 to 2017. We show that effective institutions (measured by judicial efficiency) and higher incomes could help reduce conflict in fragile states. In contrast, democratic institutions do not seem to mitigate violence in these countries. It also appears that education and trade liberalization can fuel conflict in a some cases. These results imply that education and trade reforms are not having the expected effects in fragile countries, which should first improve the social, economic and institutional conditions of their populations before enjoying the fruits of reforms and education. This may be the case for political reforms, as democratic experiences seem to lead to an increase in violence in some countries in our sample