Garriga, Ana Carolina (2022) Central Banks and Civil War Termination. Journal of Peace Research, 59 (4). pp. 508-525. DOI https://doi.org/10.1177/00223433211038194
Garriga, Ana Carolina (2022) Central Banks and Civil War Termination. Journal of Peace Research, 59 (4). pp. 508-525. DOI https://doi.org/10.1177/00223433211038194
Garriga, Ana Carolina (2022) Central Banks and Civil War Termination. Journal of Peace Research, 59 (4). pp. 508-525. DOI https://doi.org/10.1177/00223433211038194
Abstract
The ability to finance conflict likely affects the odds of sustaining a war and succeeding in it. Recent literature explores rebel group funding, but far less is known about how states finance their own war efforts. This paper posits that the design of central banks should affect civil war termination. In particular, it argues that central bank independence (CBI) affects civil war termination through two channels. First, financial markets consider CBI as a good signal in terms of macroeconomic stability and debt repayment. In this way, independent central banks enhance the ability of the government to access credit to finance and end a civil war. Second, CBI is associated with lower inflation. Inflation control reduces one source of additional grievances that the civil war may impose on citizens. On a sample of civil wars between 1975 and 2009, CBI is associated with a substantial increase in the likelihood of war termination. When the form of termination is disaggregated, (higher) CBI is associated with a higher probability of government victory, relative to continued conflict and to other outcomes. Additional tests provide support for the argued mechanisms: during civil wars, countries with more independent central banks access international credit markets in better conditions – i.e., they pay lower interest rates, and receive longer grace and maturity periods on new debt. Furthermore, in countries experiencing civil wars, central bank independence is associated with lower inflation.
Item Type: | Article |
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Additional Information: | Source info: Journal of Peace Research, Forthcoming |
Uncontrolled Keywords: | Central Banks; Central Bank Independence; Civil War Termination; Conflict Finance; Inflation; International Finance |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Government, Department of |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 10 Dec 2021 10:06 |
Last Modified: | 30 Oct 2024 19:19 |
URI: | http://repository.essex.ac.uk/id/eprint/30738 |
Available files
Filename: JPR_Garriga 2021.pdf
Licence: Creative Commons: Attribution-Noncommercial 3.0