Conflict and poverty : Poverty and Shared Prosperity 2020 background paper

This paper analyzes the relationship between poverty and conflict in the macro and regional data, including a detailed case study of Uganda. The paper relies on a large and growing literature that provides evidence on the devastating impact that conflict has on health and expectations. Based on this evidence, it develops a statistical framework to track the cumulative long-term impact that armed conflict has on poverty, which the paper calls conflict debt. The data confirm that contemporaneous conflict leads to a conflict debt which is only recovered slowly. The empirical model is not only a good description of the cross-country aggregate poverty time-series data, but also regional cross-sectional data. A new aspect in the model is that armed conflict can prevent poverty reduction and, once it is over, allow for strong catch-up effects as they exist in the data. But in the most conflict-ridden countries, repeated cycles of violence prevent poverty from recovering. According to the most conservative estimates, these countries and regions would have 5-10 percentage points lower poverty rates without their conflict debt