Authors:

• Rok Spruk, University of Ljubljana, School of Economics and Business
• Aleksandar Kešeljević, University of Ljubljana, School of Economics and Business
• Stefan Nikolić, Loughborough University, London

Keywords:

Civil war | Economic growth | Ethnic conflict | Regions | Yugoslavia

Abstract:

This paper studies the long‐term effects of the Yugoslav civil war (1987–1995) on subnational economic growth across 78 regions in five former Yugoslav republics from 1950 to 2015. We construct counterfactual growth trajectories using a robust region‐level donor pool from 32 conflict‐free countries. 

Applying a hybrid synthetic control and difference‐in‐differences approach, we find that the civil war inflicted significant regional per capita GDP losses estimated at 38 percent relative to the synthetic counterfactual, with substantial regional heterogeneity. The most war‐affected regions suffered prolonged and permanent economic declines, while north‐western regions and capital cities experienced more transitory effects. Population displacement, ethnic fractionalization and polarization, and economic geography help explain cross‐regional variation in GDP losses. Our results are robust to extensive variety of specification tests, placebo analyses, and falsification exercises.

The Sustainable Development Goals (SDGs) addressed in the article are:

• SGD 1 – No Poverty
• SGD 5 – Gender equality
• SDG 8 – Decent work and economic growth
• SGD 10 – Reduced inequality
• SGD 16 – Peace, justice and strong institutions

The article is published in:
Journal of Regional Science (Wiley)

The content is freely accessible at:

Ethnic Conflicts, Civil War, and Economic Growth: Region-Level Evidence From Former Yugoslavia