The effect of the Troubles on GDP in Northern Ireland

This paper explores the effect of conflict on GDP in Northern Ireland. A synthetic control region constructed as a weighted average of other UK regions provides an estimate of counterfactual ‘no-conflict’ GDP. Comparing this with actual per capita GDP suggests a negative impact of up to 10%. Excluding the increased grants provided in response to the conflict, a 15–20% reduction is evident. Most forms of terrorist activity had negative effects over the period 1969–1997. Deaths attributable to Republican paramilitary groups or to the State appear to have a greater and more lasting impact on GDP than deaths attributable to Loyalist paramilitaries.