Marc Vothknecht, Sudarno Sumarto
This paper analyses the impact of violent conflict on economic growth using a unique dataset from the villages of Indonesia. We compile a panel dataset at district level for the period 2002-2008, and disentangle the overall negative economic effect of violent conflict into its sectoral components. Our results reveal substantial differences across sectors, with manufacturing industries and the service sectors being most affected. The short-run impacts on growth thereby appear to be only temporal, and some evidence for the 'phoenix effect' in the early post-conflict period is found. A series of alternative specifications confirm the main findings of the analysis.
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