Hostname: page-component-586b7cd67f-t7fkt Total loading time: 0 Render date: 2024-11-25T02:00:59.476Z Has data issue: false hasContentIssue false
  • English
  • Français

Economic Liberalization via IMF Structural Adjustment: Sowing the Seeds of Civil War?

Published online by Cambridge University Press:  19 April 2010

Caroline A. Hartzell ,
Matthew Hoddie  and
Molly Bauer
Caroline A. Hartzell
Affiliation:
Gettysburg College, Penn. E-mail: [email protected]
Matthew Hoddie
Affiliation:
Towson University, Md. E-mail: [email protected]
Molly Bauer
Affiliation:
University of California, San Diego. E-mail: [email protected]
Get access

Abstract

Previous studies that have explored the effects of economic liberalization on civil war have employed aggregate measures of openness and have failed to account for potential endogeneity bias. In this research note, we suggest two improvements to the study of the relationship between liberalization and civil war. First, emphasizing that it is processes that systematically create new economic winners and losers rather than particular levels of economic openness that have the potential to generate conflict, we consider the effects of one oft-used means of liberalizing economies: the adoption by countries of International Monetary Fund (IMF) structural adjustment programs. Second, we use a bivariate probit model to address issues of endogeneity bias. Analyzing all data available for the period between 1970 and 1999, we identify an association between the adoption of IMF programs and the onset of civil war. This finding suggests that IMF programs to promote economic openness unintentionally may be creating an environment conducive to domestic conflict.

Type
Research Note
Information
International Organization , Volume 64 , Issue 2 , April 2010 , pp. 339 - 356
Copyright
Copyright © The IO Foundation 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Abouharb, M. Rodwan, and Cingranelli, David L.. 2006. The Human Rights Effects of World Bank Structural Adjustment, 1981–2000. International Studies Quarterly 50 (2):233–62.CrossRefGoogle Scholar
Achen, Christopher H. 1986. The Statistical Analysis of Quasi-Experiments. Berkeley: University of California Press.CrossRefGoogle Scholar
Auvinen, Juha Y. 1996. IMF Intervention and Political Protest in the Third World: A Conventional Wisdom Refined. Third World Quarterly 17 (3):377–400.CrossRefGoogle Scholar
Barbieri, Katherine, and Reuveny, Rafael. 2005. Economic Globalization and Civil War. Journal of Politics 67 (4):1228–47.CrossRefGoogle Scholar
Barro, Robert J., and Lee, Jong-Wha. 2005. IMF Programs: Who Is Chosen and What Are the Effects? Journal of Monetary Economics 52 (7):1245–69.CrossRefGoogle Scholar
Beck, Nathaniel, Katz, Jonathan N., and Tucker, Richard. 1998. Taking Time Seriously: Time-Series-Cross-Section Analysis with a Binary Independent Variable. American Journal of Political Science 42 (4):1260–88.CrossRefGoogle Scholar
Bienen, Henry S., and Gersovitz, Mark. 1985. Economic Stabilization, Conditionality, and Political Stability. International Organization 39 (4):729–54.CrossRefGoogle Scholar
Bussmann, Margit, and Schneider, Gerald. 2007. When Globalization Discontent Turns Violent: Foreign Economic Liberalization and Internal War. International Studies Quarterly 51 (1):79–97.CrossRefGoogle Scholar
Cardoso, Eliana, and Helwege, Ann. 1993. Latin America's Economy: Diversity, Trends, and Conflicts. Cambridge, Mass: MIT Press.Google Scholar
Collier, Paul, Elliott, V. L., Hegre, Håvard, Hoeffler, Anke, Reynal-Querol, Marta, and Sambanis, Nicholas. 2003. Breaking the Conflict Trap: Civil War and Development Policy. Vol. 1. Washington, D.C./New York: World Bank/Oxford University Press.Google Scholar
Collier, Paul, and Hoeffler, Anke. 2004. Greed and Grievance in Civil War. Oxford Economic Papers 50 (4):563–95.CrossRefGoogle Scholar
Custers, Peter. 2006. Notes on Liberia's Economic Crisis Before the Start of the Civil War. Unpublished manuscript. Available at ⟨http://www.petercusters.nl/index.php?topic=Campaigning&style_id=0⟩. Accessed 8 January 2010.Google Scholar
de Soysa, Indra. 2002. Paradise Is a Bazaar? Greed, Creed, and Governance in Civil War, 1989–99. Journal of Peace Research 39 (4):395–416.CrossRefGoogle Scholar
Di John, Jonathan. 2008. Conceptualizing the Causes and Consequences of Failed States: A Critical Review of the Literature. Crisis States Research Centre Working Paper No. 25. Available at ⟨http://www.crisisstates.com/download/wp/wpSeries2/wp25.2.pdf⟩. Accessed 8 January 2010.Google Scholar
Edwards, Sebastian. 1998. Openness, Productivity and Growth: What Do We Really Know? The Economic Journal 108 (447):383–98.CrossRefGoogle Scholar
Ellis-Jones, Mark. 2003. States of Unrest III: Resistance to IMF and World Bank Policies in Poor Countries. London: World Development Movement.Google Scholar
Esty, Daniel C., Goldstone, Jack A., Gurr, Ted Robert, Harff, Barbara, Levy, Marc, Dabelko, Geoffrey D., Surko, Pamela T., and Unger, Alan C.. 1999. Environmental Task Force Report: Phase II Findings. Environmental Change and Security Project Report 5:49–79.Google Scholar
Fearon, James D. 2005. Primary Commodity Exports and Civil War. Journal of Conflict Resolution 49 (4):483–507.CrossRefGoogle Scholar
Fearon, James D., and Laitin, David D.. 2003. Ethnicity, Insurgency, and Civil War. American Political Science Review 97 (1):75–90.CrossRefGoogle Scholar
Gartzke, Erik, Li, Quan, and Boehmer, Charles. 2001. Investing in the Peace: Economic Interdependence and International Conflict. International Organization 55 (2):391–438.CrossRefGoogle Scholar
Garuda, Gopal. 2000. The Distributional Effects of IMF Programs: A Cross-country Analysis. World Development 28 (6):1031–51.CrossRefGoogle Scholar
Greene, William H. 2003. Econometric Analysis. 5th ed.Upper Saddle River, N.J.: Prentice Hall.Google Scholar
Heckman, James J. 1979. Sample Selection Bias as a Specification Error. Econometrica 47 (1):153–61.CrossRefGoogle Scholar
Heckman, James J. 1990. Varieties of Selection Bias. American Economic Review 80 (2):313–18.Google Scholar
Hegre, Håvard, Ellingsen, Tanja, Gates, Scott, and Gleditsch, Nils Petter. 2001. Towards a Democratic Civil Peace? Democracy, Political Change, and Civil War 1816–1992. American Political Science Review 95 (1):33–48.CrossRefGoogle Scholar
Hegre, Håvard, Gissinger, Ranveig, and Gleditsch, Nils Petter. 2003. Globalization and Internal Conflict. In Globalization and Armed Conflict, edited by Schneider, Gerald, Barbieri, Katherine, and Gleditsch, Nils Petter, 251–75. Lanham, Md.: Rowman and Littlefield.Google Scholar
Hegre, Håvard, and Sambanis, Nicholas. 2006. Sensitivity Analysis of Empirical Results on Civil War Onset. Journal of Conflict Resolution 50 (4):508–35.CrossRefGoogle Scholar
Heston, Alan, Summers, Robert, and Aten, Bettina. October 2002. Penn World Table Version 6.1. Center for International Comparisons at the University of Pennsylvania. Available at ⟨http://pwt.econ.upenn.edu/php_site/pwt_index.php⟩. Accessed 8 January 2010.Google Scholar
Jensen, Nathan M. 2004. Crisis, Conditions, and Capital: The Effect of International Monetary Fund Agreements on Foreign Direct Investment Flows. Journal of Conflict Resolution 48 (2):194–210.CrossRefGoogle Scholar
Jones, Andrew. 2007. Applied Econometrics for Health Economists: A Practical Guide. 2d ed.Abingdon, England: Radcliffe.CrossRefGoogle Scholar
Kimball, Anessa L. 2006. Alliance Formation and Conflict Initiation: The Missing Link. Journal of Peace Research 43 (4):371–89.CrossRefGoogle Scholar
King, Gary, Honaker, James, Joseph, Anne, and Scheve, Kenneth. 2001. Analyzing Incomplete Political Science Data: An Alternative Algorithm for Multiple Imputation. American Political Science Review 95 (1):49–69.CrossRefGoogle Scholar
Maddala, G.S. 1983. Limited-Dependent and Qualitative Variables in Economics. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Marshall, Monty G., and Jaggers, Keith. 2006. Polity IV Annual Time-Series Dataset. Available at ⟨http://www.systemicpeace.org/polity/polity4.htm⟩. Accessed 8 January 2010.Google Scholar
Mason, T. David. 2003. Globalization, Democratization, and the Prospects for Civil War in the New Millennium. International Studies Review 5 (4):19–35.CrossRefGoogle Scholar
McDonald, Patrick J. 2004. Peace Through Trade or Free Trade? Journal of Conflict Resolution 48 (4):547–72.CrossRefGoogle Scholar
Miguel, Edward, Satyanath, Shanker, and Sergenti, Ernest. 2004. Economic Shocks and Civil Conflict: An Instrumental Variables Approach. Journal of Political Economy 112 (4):725–53.CrossRefGoogle Scholar
Nooruddin, Irfan, and Simmons, Joel W.. 2006. The Politics of Hard Choices: IMF Programs and Government Spending. International Organization 60 (4):1001–33.CrossRefGoogle Scholar
Oneal, John R., and Russett, Bruce. 1997. The Classical Liberals Were Right: Democracy, Interdependence, and Conflict, 1950–1985. International Studies Quarterly 41 (2):267–94.CrossRefGoogle Scholar
Paris, Roland. 2004. At War's End: Building Peace After Civil Conflict. New York: Cambridge University Press.CrossRefGoogle Scholar
Pastor, Manuel Jr. 1987. The Effects of IMF Programs in the Third World: Debate and Evidence from Latin America. World Development 15:249–62.CrossRefGoogle Scholar
Polachek, Solomon W. 1980. Conflict and Trade. Journal of Conflict Resolution 24 (1):55–78.CrossRefGoogle Scholar
Przeworski, Adam, and Limongi, Fernando. 1993. Political Regimes and Economic Growth. Journal of Economic Perspectives 7 (3):51–69CrossRefGoogle Scholar
Przeworski, Adam, and Vreeland, James Raymond. 2002. A Statistical Model of Bilateral Cooperation. Political Analysis 10 (2):101–12.CrossRefGoogle Scholar
Rodrik, Dani. 2006. Goodbye Washington Consensus, Hello Washington Confusion? A Review of the World Bank's Economic Growth in the 1990s: Learning from a Decade of Reform. Journal of Economic Literature 44 (4):973–87.CrossRefGoogle Scholar
Russett, Bruce, and Oneal, John R.. 2001. Triangulating Peace: Democracy, Interdependence, and International Organizations. New York: Norton.Google Scholar
Schneider, Gerald, Barbieri, Katherine, and Gleditsch, Nils Petter. 2003. Globalization and Armed Conflict. Lanham, Md.: Rowman and Littlefield.Google Scholar
Sidell, Scott R. 1988. The IMF and Third-World Political Instability: Is There a Connection? New York: St. Martin's Press.CrossRefGoogle Scholar
Smith, Stephen C. 1991. Industrial Policy in Developing Countries: Reconsidering the Real Source of Export-Led Growth. Washington, D.C.: Economic Policy Institute.Google Scholar
Snider, Lewis W. 1990. The Political Performance of Governments, External Debt Service, and Domestic Political Violence. International Political Science Review 11 (4):403–22.CrossRefGoogle Scholar
Vreeland, James Raymond. 2001. The Effect of IMF Programs on Labor. World Development 30 (1):121–39.CrossRefGoogle Scholar
Vreeland, James Raymond. 2003. The IMF and Economic Development. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Walton, John, and Seddon, David. 1994. Free Markets and Food Riots: The Politics of Global Adjustment. Cambridge, Mass.: Blackwell.CrossRefGoogle Scholar
Wilde, Joachim. 2000. Identification of Multiple Equation Probit Models with Endogenous Dummy Regressors. Economics Letters 69 (3):309–12.CrossRefGoogle Scholar
Williamson, John. 1989. What Washington Means by Policy Reform. In Latin American Readjustment: How Much Has Happened?, edited by Williamson, John, 7–20. Washington, D.C.: Institute for International Economics.Google Scholar
World Bank. 2006. World Development Data and Statistics 2006. Accessed Through World Development Indicators Online. Available at ⟨http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,menuPK:232599∼pagePK:64133170∼piPK:64133498∼theSitePK:239419,00.html⟩. Accessed 8 January 2010.Google Scholar