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Conflict, Identity and Markets


The developing world has been plagued by many civil conflicts in the past thirty years. Understanding the roots and the consequences of these conflicts is crucial to fight poverty. This project will take an economic approach to investigate the interplay between cultural, political and economic determinants of conflict in poor countries. I will assess the role of domestic and international factors. Domestic factors include variables such as cultural identity, income inequality, resource endowments and geography. I will re-examine the role of ethnic diversity using original multi-dimensional indicators. These take into account that the salience of ethnic identity may depend on how much it overlaps with categories based on income, education, etc. I will also re-assess the role of natural resource abundance from a theoretical and empirical standpoint. I will develop a theory of how rebel groups are organized drawing on the theory of incentives and test it using detailed geographic information on the location of mineral deposits in Africa. I will also analyze the role of international players using a methodology based on financial markets’ reactions to news. This methodology will allow me to address questions such as: Which companies gain or lose from violent conflict? How can we detect violations of international embargoes? What are the private incentives of complying with international norms, i.e. can reputation costs be quantified? These are questions of paramount importance from a policy perspective and on which almost no academic research exists in economics. Overall, the project should help integrate economic, social and political explanations for the occurrence of conflict in developing countries. I expect that its outcome should comprise the creation of new datasets, propose new methodological tools and offer some insights for designing economic policies to prevent conflict and fight poverty.

Call for proposal

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Via sarfatti 25
20136 Milano

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Nord-Ovest Lombardia Milano
Activity type
Higher or Secondary Education Establishments
Principal investigator
Eliana La Ferrara (Prof.)
Administrative Contact
Laura Salini (Ms.)
EU contribution
No data

Beneficiaries (1)