The Causes of Civil War

The dominant hypothesis in the
literature that studies conflict is that poverty is the main
cause of civil wars. The authors instead analyze the effect
of institutions on civil war, controlling for income per
capita. In their set up, institutions are endogenous and
colonial origins affect civil wars through their legacy on
institutions. Their results indicate that institutions,
proxied by the protection of property rights, rule of law
and the efficiency of the legal system, are a fundamental
cause of civil war. In particular, an improvement in
institutions from the median value in the sample to the 75th
percentile is associated with a 38 percentage points'
reduction in the incidence of civil wars. Moreover, once
institutions are included as explaining civil wars, income
does not have any effect on civil war, either directly or indirectly.