Economic liberalization and its impact on civil war, 1870--2000

What is the impact of economic liberalization on the probability of civil war? Economic liberalization describes the choices governments make to remove barriers to integration into the international economic system. Existing work has found that higher levels of integration into the international economic system have been associated with various levels of domestic conflict. The argument made is that governments will liberalize their economies when it benefits them politically.; Governments who need to satisfy a broad swathe of the population in order to retain power will liberalize their economies slowly, moderating the disruptive consequences of increased integration into the international economic system, while providing welfare benefits to those groups that lose out. The generation of wealth and the provision of assistance to those groups adversely affected in the process means that this source of liberalization reduces the probability of civil conflict.; In comparison, governments who need only satisfy a small portion of the population are much less concerned about producing fiscally sound economic policies and consequently get themselves into more economic difficulties. When these difficulties generate political crises they will seek assistance from international financial institutions. Mandated external liberalization under the World Bank and IMF is rapid and creates social and economic disruption. This increases the probability of rebellion as political entrepreneurs capitalize on such situations persuading groups that have lost our to demand a redistribution of power and wealth for their own benefit.; An empirical examination of nation states between 1870 and 2000 provides empirical evidence for the framework proposed. Governments with large winning coalitions are more likely to liberalize their economies while World Bank and IMF Structural adjustment agreements lower levels of liberalization, failing to promote export led economic growth. By accounting for these underlying sources of liberalization, the impact of liberalization through its impact on wealth generation reduces the probability of major civil war in the 1870--2000 and 1946--2000 period. A second set of analyses found that rapid economic liberalization reduces the probability of major civil war in the 1870--2000 and minor civil war in the 1950--2000 periods, provided that governments maintain the economic welfare of their citizens.