War and famine, peace and light? The economic dynamics of conflict in Somalia 1993–2009

Original Source: http://jpr.sagepub.com/content/50/5/545.full

The literature on war economies argues that prolonged civil wars have an economic logic: certain groups may obtain material gains from committing acts of violence and hence resist peacebuilding efforts. Objective tests of these predictions have so far been limited, as corruption and conflict prevent the collection of reliable economic data on the ground. Remote sensing and Geographic Information Science techniques enable us to overcome these problems of terrestrial data collection. Electricity consumption manifested as night-time light emissions recorded in satellite images is proposed as a proxy for changes in disposable income in Somalia’s cities. The nightlight images provide striking illustrations of economic decline and recovery and clearly show the contrast between the stable regions of Northern Somalia and the chaos and anarchy of Southern Somalia. Based on geospatial analyses of settlement patterns in Somali cities, we argue that specific metrics of light output can be used to proxy for the incomes of different social groups. We use geo-coded conflict event data to analyze the economic impact of conflict on local light output and therefore incomes. We find a significant peace dividend for poorer households located at the margins of cities, which benefit both from local stability and more peaceful conditions in the country as a whole. By contrast, the central business districts are relatively well insulated from the effects of local conflict, and violence in Mogadishu has positive effects on light output from cities where humanitarian aid agencies are located. Future peace initiatives need to confront these economic incentives for continued conflict and state failure in Somalia.

There is currently much political and academic interest in Somalia. Addressing issues of governance in Somalia is important for maritime security, for regional stability and to help millions of victims of periodic drought and conflict. Considerable political and financial resources have been invested by the international community to resolve the civil conflict over the last two decades. However, so far all attempts to bring about effective and consensual central governance have failed, either through domestic ‘spoilers’ or through the intervention of neighbouring countries (Menkhaus, 2007a,2009). Questions are raised about the potentially counterproductive effects of international intervention in Somalia. Eminent country experts argue that international actors may contribute to the ‘war economy’ and (inadvertently) fund the conflict (Hansen, 2007; Hansen et al., 2012; Menkhaus, 2009). To design more effective interventions we need evidence on how the Somali war economy operates.

The literature on ‘war economies’ argues that in some countries war is not a temporary breakdown, but a sustainable, alternative form of social order. The absence of central government creates economic opportunities for some groups, which have no interest in bringing the conflict to an end (Duffield, 1998). Conflict can therefore become entrenched as ‘economics by other means’ (Keen, 1998). The simplest form of the ‘war economy’ is banditry and looting. In more advanced war economies armed groups provide ‘protection’ for (legal and illicit) businesses, tax production, trade and financial flows and manipulate and divert humanitarian and development aid. Warlords provide government functions in so-called ‘shadow states’ (Reno, 1998, 1999). Violence is an integral part of the war economy as elites use it to extract, contest and redistribute economic rents and attract and divert humanitarian aid.

The literature on war economies is based on detailed case studies and generates clear testable implications for the economic dynamics of conflict. However, because of the absence of regular and reliable data collection, the economic dynamics of civil war have not yet been statistically explored. In this article we use remote sensing and geographic information science techniques to recover the economic history of Somalia’s cities during the civil war from the archives of images of night-time light emissions. This allows us to test key hypotheses of the ‘war economies’ literature with economic data that are not manipulated by any of the conflict parties. Night-time light emissions have been shown to be an excellent proxy for income especially in statistically underdeveloped and corrupt countries (Chen & Nordhaus, 2011;Henderson, Storeygard & Weil, 2011). We present striking images of the patterns of economic decline and recovery across Somalia from 1993 to 2008, indicating the effectiveness of informal governance in supporting local economic development as well as the costs of high intensity conflict.

We create proxies for changes in income for different social groups by looking at changes in the intensity of light use among those already using electricity and changes in access to electricity at the cities’ margins. We show how these correlate with exogenous economic shocks and variations in local and overall conflict intensity derived from the EDACS geo-coded conflict event data on Somalia. Finally, we statistically explore the economic dynamics of the Somali conflict in a multivariate statistical model.

We show that the rich are relatively well insulated from the economic costs of violence, whereas the poor experience significant peace dividends. Conflict outside a city may even bring local benefits, either through diverting investment from more violent areas or through triggering international aid flows. Changes in light emissions from Somalia therefore provide evidence for the existence of a profitable war economy. This may explain the apathy and occasional resistance from political and business elites to previous international efforts to resolve state failure in Somalia.

The article is structured as follows: in the second section we review the literature on war economies and derive our hypotheses. In the third section we review the nightlights literature, introduce our method and data and present visual images of the economic history of Somalia’s cities. In the fourth section we show correlations between nightlight emissions, conflict and exogenous economic shocks, providing preliminary evidence of the validity of the income proxies and the war economy hypotheses. We then present the results of a full multivariate econometric model. The fifth section concludes.