The incidence of internal conflict has intensified after the end of the Second World War. Although research has concentrated on the aggregated consequences of civil war, microeconomic research on the impacts of conflict and the channels through which armed conflict affects households is scarce.
Colombia, a country that has endured a civil conflict for more than 40 years, provides an interesting opportunity to understand the microeconomic impacts of conflict.
The objectives of the study funded by DFID are threefold.
- To understand the effect that armed conflict has had on a broad range of entrepreneurial decisions in the manufacturing sector.
- To explore the effects that armed conflict has had on agricultural production.
- To estimate the impact on health outcomes caused by the aerial spraying of herbicides to destroy illicit crops.
Two complementary methodologies are used to achieve these objectives. First, the study will develop theoretical models to identify the channels through which armed conflict may influence entrepreneurial activities, agricultural production decisions and health outcomes. Second, the study will use rich micro-level data sets to empirically estimate the causal effect of conflict on economic and social outcomes.