The Microeconomics of Violent Conflict

In our brief review, we take stock of the emergence, in the last decade, of the “microeconomics of violent conflict” as a new subfield of empirical development economics. We start by de-bunking common misperceptions about the microeconomics of conflict and identify several contributions to economic theory and, in particular, to empirics, methods and data. We also show how the subfield is enriched through cooperation with scholars working in related disciplines. We expect future work to contribute inter alia to the evidence base on peacebuilding interventions, the development of post-conflict institutions, the behavior of firms in conflict areas and the role of emotions in decision-making. We note a disconnect between the rapidly evolving academic subfield on the one hand and the relatively limited use of knowledge thus generated by humanitarian and development organisations and policy makers working in and on conflict-affected areas. We conclude by suggesting that teaching in economics and the discipline-specific JEL codes have not yet kept pace with this recent intellectual development.