Violent conflict is common among the poorest countries and clearly one of the most important
barriers to growth, destroying physical, human, and social capital, often in the long run. At
the same time, it is a development ‘trap’ that is not easy to escape from as poverty has also
been found to be one of the most important determinants of civil war (Collier 2008). Currently,
1.5 billion people live in areas affected by fragile statehood, conflict, or large-scale organised
criminal violence – no low-income fragile or conflict-affected country has yet achieved a single
Millennium Development Goal (World Bank 2011a). Each year over the course of the last
decades, an average of two new civil wars broke out, creating a cost of approximately 100 billion
US dollars – or double the aid budget (Collier 2008). In 2012, 14.5 million people lived abroad
as refugees and 37,992 people were counted as battle-related deaths (World Bank 2015). These
few descriptive numbers underline the human and economic harm that political violence brings
about and hence the importance of understanding in detail its causes and consequences.
In the beginning of the 2000s, economics research began to address the determinants of (civil)
war, namely in the form of the seminal cross-country analyses by Collier and Hoeffler (1998,
2004) and Fearon and Laitin (2003).1 These authors find similar factors driving the occurrence
of violent conflicts, such as poor economic performance, ethnic diversity, the ‘natural resource
curse’, and a larger share of young men who can potentially rebel. Indicators for political
‘grievances’, e.g., the political discrimination of specific groups, were not found to play a
significant role.