Conflict and state-building
Some countries are poor and violence stricken, whereas other more affluent nations resolve conflicts peacefully via functioning social institutions. Reasons for the difference are not fully understood. The EU-funded STATECAP (State capacity, development, conflict, and climate change) project economically modelled the roles of state-building and violent conflict in development. The study also modelled the economics of climate change. Researchers built a sequence of models, starting with a basic framework. The first-stage model assumed that infrastructure investment expands a state's ability to raise revenue and support private markets. Model extensions added violence in the form of repression and civil war. Such modelling helped with the design of development assistance. Results show that different forms of assistance can have various consequences in the same state. Also, the same form of assistance can have different effects in different states. The study further modelled the economics of climate change. The team assessed the historical effects of weather on infant mortality in Africa, using various data sources. Results include estimates of causal effects on health, via malnutrition and malaria. STATECAP brought the analysis of state capacity into the field of economics. Additionally, the new methodology allows assessment of weather impacts in terms of health, thus aiding the estimation of economic costs of climate change.
