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Estimating the direct costs of social conflicts: Road blockings in Bolivia

Bruno De Borger and Vincenzo Verardi

Working Papers from University of Antwerp, Faculty of Business and Economics

Abstract: Social conflicts are a serious obstacle to economic growth in many Latin American societies, affecting economic activity both in the short- and the long-run. The purpose of this paper is twofold. First, we develop a methodology to estimate the direct, short-run impact of frequently occurring exponents of local conflicts (such as road blockings) on economic activity. The methodology is based on using high frequency (daily) data to estimate the relation between a proxy for economic activity and a proxy for local social conflicts. Careful analysis of impulse-response functions traces the effect of local social conflicts on economic activity. This information is combined with the aggregate annual time series relation between GDP and the high frequency proxy for economic activity to estimate the direct cost of local social conflicts for the economy as a whole. Second, we apply the proposed methodology to analyze the direct economic costs of road blockings in Bolivia, using detailed daily information for the year 2003. The results show that the direct costs of road blocking are large. Stronger institutions are a critical factor in reducing the prevalence of such conflicts and to avoid the huge economic costs that they imply.

Keywords: Social conflicts; Road blockings; Impulse-response functions (search for similar items in EconPapers)
Pages: 19 pages
Date: 2008-06
New Economics Papers: this item is included in nep-lam
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https://repository.uantwerpen.be/docman/irua/c5f5d2/6454c97a.pdf (application/pdf)

Related works:
Journal Article: Estimating the direct costs of social conflicts: Road blockings in Bolivia (2009) Downloads
Working Paper: Estimating the direct costs of social conflicts: road blockings in Bolivia (2007) Downloads
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