The Diabolical Spiral: Food Prices and Civil Conflicts

Isabelle Cadoret, Marie-Hélène Hubert and Véronique Thelen
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Véronique Thelen: Université de Rennes 1, CREM UMR CNRS 6211, France

Economics Working Paper Archive (University of Rennes & University of Caen) from Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS

Abstract: Facors of production may be destroyed in countries that experience a civil conflict, which most likely limits agricultural production and drives up domestic food prices. Thus, a country can enter into a diabolical spiral between food prices and civil conflicts. Our study estimates this diabolical spiral by employing three-stage least squares. We use a panel data set of 82 countries spanning from 1995 to 2009. Our results reveal that a one per cent rise in domestic food prices increases the likelihood of civil conflicts by two percentage points the following year, and this magnitude is significantly higher in Southeast Asia. During an episode of civil conflict, domestic food prices are around 65 per cent higher. Finally, we use our results to calculate the impact of the 2007-2009 food crisis on the probability of conflicts. This probability increased by 3.9 percentage points during the 2007-2009 food crisis, with the highest relative increase occurring in the Middle East and North Africa.

Date: 2017-12
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