the effect of conflict on people

anuseholds
Mar 2016
During the last decade, there has been a particular focus of research on the economic and social
impact of conflict. The evidence that has emerged shows that armed conflict takes a heavy toll on
development and the welfare of the population that are subject to such continued violence. While
this is not surprising at all, it can be extremely devastating. Understanding the causes and
implications of this type of violence on the individual and communities will only enable us to lessen
the negative impact.
The transactions cost of armed conflict
Violence during armed conflicts causes destruction and limits market transactions. Public and private
assets are destroyed, people are maimed or killed, and markets shrink as a result of higher
transaction costs. In addition, people change their behavior to survive amid violence. Thus, instead
of maximising profits, the population dedicates most of its effort on avoiding victimisation and
increasing their chance of survival. Both dynamics decrease the income of the people living in
conflict, push some families into poverty and create poverty traps difficult to overcome.
Evidence shows the negative impacts of violence on households and firms cause a drop in
production through four broad channels:
1. Violence destroys public and private assets, thereby decreasing the productive capacity of the
firms
2. Aggressions against the population erode human capital by killing and maiming as well as
reducing school enrollment and deteriorating the health conditions of the population
3. Violent shocks reduce markets efficiency by contracting the supply of goods, increasing
transactions costs and shrinking the size of trade networks
4. Conflict imposes additional costs beyond destruction. By increasing uncertainty and risk, conflict
forces households and firms to change behavior to avoid being targeted or to minimize the potential
losses after an attack. Firms are closed, agricultural producers prefer to cultivate crops of low risk
and low returns and households use cattle to cover drops in income.
What does the next decade hold for conflict and development research?
More than ten years of economic research on these issues has contributed to understand how
households and firms respond to conflict and the ensuing social and economic impacts. The
challenges for the next decade:
 Are to understand better how to minimise the negatives impacts once the conflict is over
 Deter households and firms from persisting on behaviours adopted during conflict
 Devise ways to reinforce the unexpected positive impacts of conflict
 Identify and mitigate potential dynamics that may reignite conflict.

Answering these questions requires research on how the conditions of households and firms evolve
during post-conflict periods; how conflict shapes institutions, creates new elite and reinforces old
inequalities; how the end of conflict may produce new forms of violence, grievances and tensions;
and how programs and investments may contribute not only to improve the economic conditions of
the civil population but also to process of restitution and reconciliation.
Conflict is development in reverse. Ten years of economic research have convincingly demonstrated
the economic and social impacts of conflict are considerable. Ahead of the ESRC-DFID Impact
Conference next week, there is no better time to reflect on the lessons we have learnt, and plan for
the future of our research. The next ten years of research will hopefully contribute to devise ways to
minimise the negative impacts of conflicts and to avoid the new conflicts or the emergence of new
forms of violence.
It is worth the effort