<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>Despite informality being the norm in conflict-affected countries, most estimates of the impact of conflict on economic activity rely on formal sector data. Using high-frequency data from Afghanistan, this paper assesses how surges in conflict intensity affect not only the formal sector, but also informal and illicit activities. Nighttime light provides a proxy for aggregate economic activity, mobile phone traffic by registered firms captures fluctuations in formal sector output, and the land surface devoted to poppy cultivation gives a measure of illicit production. The unit of observation is the district and the period of reference is 2012–2016. The results show that an increase in conflict-related casualties has a strong negative impact on formal economic activity in the following quarter and a positive effect on illicit activity after two quarters. The impact on aggregate economic activity is negative, but more muted.</p>
</abstract>

Despite informality being the norm in conflict-affected countries, most estimates of the impact of conflict on economic activity rely on formal sector data. Using high-frequency data from Afghanistan, this paper assesses how surges in conflict intensity affect not only the formal sector, but also informal and illicit activities. Nighttime light provides a proxy for aggregate economic activity, mobile phone traffic by registered firms captures fluctuations in formal sector output, and the land surface devoted to poppy cultivation gives a measure of illicit production. The unit of observation is the district and the period of reference is 2012–2016. The results show that an increase in conflict-related casualties has a strong negative impact on formal economic activity in the following quarter and a positive effect on illicit activity after two quarters. The impact on aggregate economic activity is negative, but more muted.

Conflict and the composition of economic activity in Afghanistan

IZA Journal of Development and Migration

This work is licensed under the Creative Commons Attribution 4.0 International License.

{"article-title":"Conflict and the composition of economic activity in Afghanistan"}

Despite informality being the norm in conflict-affected countries, most estimates of the impact of conflict on economic activity rely on formal sector data....

Conflict and the composition of economic activity in Afghanistan

Publié en ligne: 07 sept. 2021

Pages: -

Accepté: 08 juil. 2021

DOI: https://doi.org/10.2478/izajodm-2021-0010

Mots clés
Afghanistan, conflict, economic activity

© 2021 Virgilio Galdo et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Conflict and the composition of economic activity in Afghanistan

Publié en ligne: 07 sept. 2021

Pages: -

Accepté: 08 juil. 2021

DOI: https://doi.org/10.2478/izajodm-2021-0010

Mots clésAfghanistan, conflict, economic activity

© 2021 Virgilio Galdo et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Mots clés
Afghanistan, conflict, economic activity