From Capabilities to Peace: Can Mobile Money Reduce Conflicts in Developing Countries?

Alfred Michel Nandnaba
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Alfred Michel Nandnaba: UCA - Université Clermont Auvergne

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Abstract: While armed conflict remains a major impediment to economic and political stability in developing countries, the potential role of digital financial inclusion, particularly mobile money, in mitigating violent conflict remains largely unexplored. This article examines the impact of mobile money adoption on armed conflict across 103 developing countries from 2000 to 2020, using the Entropy Balancing method to address selection bias. The findings show that mobile money significantly reduces violent conflicts, with an average decrease of 282 conflict-related deaths. These results remain robust across various sensitivity checks, including alternative model specifications, instrumental variable techniques to account for the reverse causality, and analyses of dynamic and spillover effects. The study also highlights important heterogeneity in the impact depending on the type of mobile money service, the country's level of development, the duration of the conflict, financial sector development, and geographic region. Moreover, it identifies key economic channels, including income, unemployment, inequality, and consumption volatility, through which mobile money contributes to the reduction of violent conflict. These findings underscore the strategic importance of digital financial services for promoting peace and fostering economic development in low- and middle- income countries.

Keywords: Developing countries; Entropy Balancing; Mobile Money; Violent conflicts (search for similar items in EconPapers)
Date: 2026-03-05
New Economics Papers: this item is included in nep-fdg and nep-inv
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Published in Economics and Politics, 2026, ⟨10.1111/ecpo.70040⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04566893

DOI: 10.1111/ecpo.70040

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