The Impact of Armed Conflict on Economic Performance

Important gaps remain in the understanding of the economic consequences of civil war. Focusing on the conflict in Rwanda in the early 1990s, and using micro data, this article finds that households and localities that experienced more intense conflict are lagging behind in terms of consumption six years after the conflict, a finding that is robust to taking into account the endogeneity of violence. Significantly different returns to land and labor are observed between zones that experienced low- and high-intensity conflict which is consistent with the ongoing recovery. Distinguishing between civil war and genocide, the findings also provide evidence that these returns, and by implication the process of recovery, depend on the form of violence.