Blessing or curse? Assessing the local impacts of foreign direct investment on conflict in Africa

Samuel Brazys, Indra de Soysa and Krishna Chaitanya Vadlamannati
Additional contact information
Samuel Brazys: School of Politics and International Relations, University College Dublin (UCD)
Indra de Soysa: Department of Sociology and Political Science, Norwegian University of Science and Technology (NTNU)
Krishna Chaitanya Vadlamannati: School of Politics and International Relations, University College Dublin (UCD)

Journal of Peace Research, 2025, vol. 62, issue 1, 149-165

Abstract: The question of foreign direct investment (FDI) and socio-political development is debated heavily. Liberals believe that FDI brings economic opportunities and/or increased incentives for peace and security among host societies. Critics suggest that FDI is exploitative, leading to conditions that increase the risk of violence. We take a political economy perspective that views FDI as problematic depending on how FDI affects politically powerful local interests. As such, all forms of FDI should meet domestic opposition, but only FDI in the extractive sector, where domestic political actors have little at stake, escalates to major war. Building on recent work which examines this question pertaining to extractive sector FDI, we introduce sub-national, geo-referenced data on FDI in all sectors for evaluating local conflict using combined data from four distinct geo-referenced conflict databases. Using site-period fixed effects with a difference-in-difference like approach, we find that FDI in all sectors increases local conflict. Conflicts induced by most FDI sectors fall short of becoming civil war, except for extractive sector FDI.

Keywords: Africa; conflict; foreign direct investment; geo-referenced data; spatial econometrics (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/00223433231200928 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:joupea:v:62:y:2025:i:1:p:149-165

DOI: 10.1177/00223433231200928

Access Statistics for this article

More articles in Journal of Peace Research from Peace Research Institute Oslo
Bibliographic data for series maintained by SAGE Publications ().