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Impact of War on Country per Capita GDP: A Descriptive Analysis

This paper provides evidence of the impact of intraand interstate wars on country income. War data for 1970-2000 are obtained from the Correlates of War project and merged with national income data from the Penn World Table 6.1 and World Bank demographic data for 90 countries. The results show that no straightforward relationship exists between war and economic well-being, since war need not decrease GDP, and might in fact raise it. Civil war is found to generally reduce income (as in examples of Angola, Chad, or Congo), but in India war actually raised income. The effect of international war on the economy is more ambiguous: in Egypt, Iran, and Uganda, GDP per capita decreased during war time, but in Israel, Syria, and China, GDP per capita actually grew during war. The study also finds that negative effects of wars are stronger in the short run, and that low-growth countries engage in civil war, while high-growth countries fight international wars.