Session 4 a jean francois maystadt

Is There an Arab Exceptionalism When It Comes to Conflict? C. Breisinger, J.-F. Maystadt, P. Al-Riffai and J.-F. Trinh Tan Presented by Jean-Francois MaystadtIFPRI-UNESCWA Conference: Food Secure Arab World—A Roadmap for Policy & ResearchUnited Nations Economic and Social Commission for Western Asia; Beirut, 6-7 February 2012

1. Conflicts in the Arab world“How is it that countries in the Middle East and North Africa could face explosions of popular grievances despite, in some cases, sustained high growth and improvement in social indicators?” (World Development Report 2011 on Conflict, Security and Development)

The Arab World at a crossroad• “Power vacuum” : Particularly at risk• But no determinism … also opportunities Major causes of conflicts and which preventive measures? How best to accompany such political transition?

2. Conceptual framework ‘Motivation’Grievances, Inequality, Polarization, etc. ‘Opportunity’Opportunity cost to participate to violence depends onalternative sources of income, the potential loss andrewards (therefore capacity for leaders to finance) ‘Polity’Poor governance and lack of political inclusionState capacity to repress or “pay for peace”

3. Arab Exceptionalism?Collier and Hoeffler (2004, OEP)• ‘Opportunity’ (per capita income, economic growth) matters, not ‘Motivation’ (‘grievance’)Sorli et al. (2005, JCR) : 1960-2000• No MENA specific effect : “Conflict is quite well explained by a general model of civil war” (p.160)Shortcomings:• Reduced sample of countries (excl. e.g. Mauritania, Djibouti, Somalia, Sudan)• No Fixed Effect (Djankov and Reynal-Querol, forthcoming REStat)• Predictive power 30% lower compared to SSA

4. Arab exceptionalism: a puzzle Collier and Hoeffler framework is found to be too limited:  Something specific to the Arab world needs to be explained !  Puzzling economic growth effect Possible explanations?  Omitted variables: institutions inherited from the past, historical grievances, … (country fixed effects)  Where the growth is coming from? (‘Opportunity’)  Sectoral growth, Youth bulges  Better proxy for natural resource dependency (e.g. oil)  Where the growth is going to? (‘Motivation’)  Inequality  Micro and Macro Food Security Index (FSI)  Political dimension? (‘Polity’)

Main empirical model ��(��,�� ) = �� + �� + �� + �� ,��−1 + �� −1 ∗ �� + ��,�� Economic growth is the only robust finding in Collier and Hoeffler (2004) Arab exceptionalism is confirmed! ‘Opportunity’  Sectoral growth does not matter  Youth bulges (share of urban male aged 15-24 over the urban (or male) population aged > 15) : no region-specific effect  Oil, gas, ores and minerals exports to GDP or dependency (>40%) . Oil dependency increases conflict in a non- monotonic way but the effect is totally driven by the Arab world

Main empirical model��(��,�� ) = �� + �� + �� + �� ,��−1 + �� −1 ∗ �� + ��,�� ‘Motivation’  Gini coefficient is uncorrelated to conflicts but known to poorly capture time-varying sources of grievances  Macro and Micro Food Security Indexes significantly increase the risk of major conflicts in Arab world ‘Polity’  Economic and political discrimination against minorities increase conflicts but not specifically for Arab countries  Past transitions to full democracy and autocracy reduce the risk of conflicts (using policyIV data, Persson and Tabellini 2006 AER)

Beyond Collier-Hoeffler framework (1) (2) (3a) (3b) (4) (5) Major Major Major Major Major Major Conflict Conflict Conflict Conflict Conflict ConflictGDP growth (t-1) -0.120** -0.197*** -0.0722 -0.25 -0.048 -0.0413 [0.0516] [0.0660] [0.170] [0.119] [0.0809] [0.0839]GDP growth*MENA (t-1) 0.265*** 0.727 0.373*** 0.113 0.252 [0.079] [0.689] [0.129] [0.219] [0.161]Child stunting (t-1) 0.000428 0.0000146 [0.00143] [0.00141]Child stunting*MENA 0.0119* 0.0111* [0.007] [0.0068]Child mortality (t-1) 0.000134 [0.0002]Child Mortality*MENA 0.0008 [0.0005]P-value (0.128)Food security index (t-1) -0.0407 [0.0462]Food security index*MENA 0.412* [0.216]Time dummies YES YES YES YES YES YESCountry Fixed Effects YES YES YES YES YES YESObservations 4,896 4,896 536 2,616 1,456 2,958Number of ccode 140 140 130 130 139 131

Beyond Collier-Hoeffler framework (6) (7) (8) (9) Major Major Major Major Conflict Conflict Conflict Conflict GDP growth (t-1) -0.339** -0.335** -0.116* -0.117* [0.139] [0.143] [0.0623] [0.0621] GDP growth*MENA (t-1) 0.437*** 0.434** 0.180** 0.117 [0.158] [0.175] [0.0791] [0.0958] Oil rents (t-1) 0.00265 [0.00227] Oil rents*MENA (t-1) -0.00847* [0.00445] Oil rents squared (t-1) -3.81E-05 [3.33e-05] Oil rents squared*MENA 0.000114** [5.00e-05] Oil dependency (t-1) -0.00876 [0.0298] Oil dependency*MENA 0.0902* [0.0486] Pol. Transition to democracy (t-1) -0.00337*** [0.00103] Pol. Transition to democracy*MENA -0.0256*** [0.00849] Pol. Transition to autocracy (t-1) -0.0019 [0.00218] Pol. Transition to autocracy*MENA -0.0189*** [0.00637] Time dummies YES YES YES YES Country Fixed Effects YES YES YES YES Observations 2,087 2,087 4,452 4,461 Number of ccode 73 73 131 131

The Arab Food Security channel �� ,�� = �� + �� + �� + �� ,�� + ��,�� ,�� = �� + �� + �� + �� ,�� ∗ ��,�� + ��,��Where��,�� = Macro and Micro Food Security Indexes��,�� = �� ,�� = net food importsFor the sample restricted to the Arab world, 2SLS-FEmodel points to the vulnerability of food net importersto changes in food international prices for foodinsecurity and in turn, to the risk of conflict

The Arab Food Security Channel (1) (2) (3) Second-stage Dep. Var. Major Major Major Conflict Conflict Conflict Child stunting 0.0464*** [0.0176] Child mortality 0.0139*** [0.00493] Food security index 1.444** [0.613] GDP growth 0.22 -0.112 0.185* (t-1) [0.206] [0.280] [0.0956] First-stage Dep. Var. Child stunting Child mortality Food security index Food Import Price Index 0.0545*** 0.162*** 0.00104*** [0.0129] [0.0547] [0.000260] GDP growth -3.343 16.25 -0.022 (t-1) [2.608] [13.82] [0.0410] Time Dummies YES YES YES Country Fixed effects YES YES YES Observations 433 257 549 Number of countries 22 24 22

Preliminary conclusions1) Transition to democracy is welcomed but the transition period is risky  Identifying the risk of conflicts is crucial, at a particularly challenging time in history2) Food insecurity matters for conflicts in the Arab world  Avoid fiscally unsustainable and not well targeted measures (e.g. subsidies)  Smart mix of policies, investments and targeted programs in the areas of trade, agriculture, water, health and education  Need pro-poor and pro-nutrition growth (see IFPRI Food Policy report “Beyond the Arab Awakening”)3) Oil dependency increases the risk of conflict but couldcreate fiscal space and could in principle be wealthenhancing

How to use oil revenues? ‘Paying for peace’ has become unsustainable, given increased repression (e.g. social media) and redistribution costs (e.g. youth and food prices) Many Arab countries show “Dutch disease” symptoms, including low economic diversification and governance issues Oil rents should be directed to pro-poor growth enhancing investments, such as infrastructure and education, and to targeted transfers to the most food insecure populations

Ways forward1. Not a paper on the Arab Awakening : only valid for major conflict events• Need for a conceptual framework aiming at understanding the dynamics of public protests and violence in the Arab countries, with a special focus on food security and food policies (e.g. subsidies)2. Cross-country analysis misses the heterogeneity• Weather shocks and violence in Somalia and South Sudan. Preliminary results stress the importance of the livestock markets in Somalia• Protests in Egypt and food policies (nutrition puzzle)• The developmental costs of conflict in Yemen

Session 4 a jean francois maystadt

by IFPRI on Feb 06, 2012

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