Climate Change and Civil War in Somalia: Does Drought Fuel Conflict through Livestock Price Shocks?

Jean-Francois Maystadt, Athur Mabiso, Olivier Ecker

Presented by

Olivier Ecker

CSAE Conference 2012: Economic Development in Africa

Center for the Study of African Economies, Oxford; March 18-20, 2012

Civil War and Drought-Induced Hunger

Source: FEWSNET/FSNAU (2012).Source: Based on ACLED data (2011).

Violent conflicts by province, 1997-2010

Estimated food security conditions, 4/2011

Motivation Extreme weather events became and are projected to become

more frequent and more severe due to climate change (IPCC 2012).

Historical data suggest strong linkages between warming and civil war in Africa (Burke et al. 2009; Hsiang et al. 2011).

Economic factors drive civil conflict (Collier & Hoeffler 1998, 2004; Blattman & Miguel 2010).

Fighters’ motivation: Expected income from participating in violent conflict as compared to conventional activities (Miguel et al. 2004; Brueckner & Ciccone 2010; Ciccone 2011)

Hypotheses

1. At the local level, droughts fuel civil conflict immediately through lowering the opportunity costs for people’s participation in fighting!

2. Given that the livestock sector is the mainstay of Somalia’s economy, drought-induced shocks on livestock prices are the main driver of conflict onsets!

Droughts and Conflicts in Somalia (1) Evidence suggests that there is a spatial overlap of

(drought-induced) hunger and poverty and occurrence of violence.

Both droughts and violent conflicts have significantly increased in Somalia in recent years.

Drought (and famine) is a slow-onset and large-area disaster, affecting large shares of the rural population concurrently.

So, people have (limited) time to cope with drought impacts.

Droughts and Conflicts in Somalia (2) Yet coping mechanisms are limited because of

widespread poverty and impaired clan support and due to absent public safety nets, lacking credit and insurance markets, etc.

Selling productive assets (particularly livestock) is often the only remaining—but largely inefficient—strategy to smoothen food consumption.

Hence, engaging in civil conflict to make an own living at the expense of others may appear opportunistic for some people.

Somalia’s stateless order facilitates self-seeking behavior.

The Economic Role of Livestock The livestock sector is central to the (rural) economy:

About 40% of national GDP Almost 90% of agricultural GDP More than 50% of all export earners Source of income and food for more than 60% of the total

population In pastoral livelihoods, 50-80% of the poor’s income=> Changes in (rural) income are determined by changes in

livestock prices to a large extent.

Livestock prices are largely supply driven and thus prone to weather shocks.

During drought, price depression is amplified by market information asymmetry.

Empirical Model (Opportunity Cost Approach)

Reduced-form regression:

with i = region and t = month, year

Two-stage regression (→ prices as channel of transmission):

(1)

(2)

Fixed effects to control for region-specific factors () and time-varied factors ()

Time trend effects () to control for e.g. world market price movements and other external factors changing over time

Measurement and Data = no. of violent conflicts by province and month (from ACLED)

= Temperature Drought Index (from NASA Power; adjusted from Mutua & Zoltan 2009)

=> Deviation from normal conditions (measures intensity and frequency of drought months and their accumulation over time)

= monthly cattle/goat/camel prices (from FNSAU market statistics), normalized by petroleum prices

The Conflict-Drought Relationship

No. of conflictsTemperature Drought Index (TDI) 0.969***

(0.289)F-value 2.03***R-squared 0.081Observations 2,340No. of regions 18

Reduced-form regression

=> More droughts lead to more violent conflicts.

The Livestock Price Channel

First stage Cattle price Goat price Camel priceTemperature Drought Index (TDI) -0.124*** -0.073*** 0.006

(0.035) (0.024) (0.033)Second stage No. of conflictsCattle price -11.13***

(4.984)Goat price -15.69***

(7.460)Camel price 186.9

(996.1)F-value (of the first stage) 5.62*** 5.01*** 6.87***R-squared 0.345 0.258 0.284Underidentification test 13.72*** 9.80*** 0.04Weak identification test 12.81 9.04 0.03Root mean square error 5.725 5.554 59.75Observations 1,289 1,585 1,560No. of regions 17 18 18

Two-stage regression

Livestock Price and Conflict Effects

Temperature Drought Index (TDI) No. of conflicts

Increase of TDI by one standard deviationCattle price -3.7% 0.58Goat price -6.3% 0.70

Increase of TDI due to an additional drought month associated witha temperature rise of 0.63⁰CCattle price -8.2% 1.28Goat price -13.9% 1.55

Simulation: 1.8-4.3⁰C increase by 2100 (IPCC A1B scenario) Increase in drought months by 3-7 Increase in violent conflicts by 4-7

Robustness of Estimates Results are entirely driven by changes in temperature,

and the TDI is a good measure for identifying droughts. The model is robust to alternative specifications,

controlling for potential effects of time lags and leads, time sensitivity, and seasonality.

Neighborhood effects seem not to matter (given the available data)

Normalization of livestock prices does not compromise the results.

Validity of Identifying Assumptions Test statistics (F-test, weak instrumental var. test) suggest

that the TDI is a strong instrument of livestock prices. Yet the possibility that droughts affect conflicts through

channels of transmission other than livestock prices (e.g., non-livestock income) cannot be ruled out completely.

However, tests of the validity of the exclusion restrictions do not reveal effects transmitted through other channels.

Possible violation: Effects of food aid on conflict=> Biases into both directions are conceivable.

But previous studies (Dorosh et al. 1995, Kirwan & McMillan 2007, Mabuza et al. 2009) suggest weak links between food aid and market price movements.

Conclusions and Policy Implications In Somalia, droughts fuel civil conflicts through

livestock price shocks. Climate change adaptation strategies contribute to

conflict prevention. Building resilience through establishing effective

coping mechanisms and generating and diversifying income earning opportunities is critical for both conflict prevention and climate change adaptation.

Direct measures to reduce people’s vulnerability include weather insurance schemes, income transfers, livestock market interventions, etc.; but little is known about their effectiveness in (semi)pastoral livelihoods.