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The economics literature typically uses counts of casualties as a measure of conflict intensity despite the fact that the units of observation vary considerably in population size. When analysing the impact of conflict on economic growth, the use of counts relies on the assumption that a given number of casualties affects large and small populations in the same way. Using within‐ and between‐country evidence, this paper demonstrates that this standard assumption can be rejected. A per capita model of conflict intensity that captures local effects of violence provides a more consistent empirical framework for both between‐country and within‐country studies.

Abstract
This article presents a model of political insulation of bureaucracies. Political influence can harm competence because it lowers the incentives of bureaucrats to invest in competence. Politicians then want to adopt institutions that insulate the bureaucracy because this establishes a commitment to reward competence. Political leaders insulate the bureaucracy if public good provision is important compared to rent extraction or when political competition forces the political elite to internalize the welfare loss caused by patronage. Through this channel political reforms can lead to reforms of the bureaucracy. The theoretical findings are illustrated with existing empirical studies and data on central bank independence.

© by De Gruyter 2015. This article presents a model of political insulation of bureaucracies. Political influence can harm competence because it lowers the incentives of bureaucrats to invest in competence. Politicians then want to adopt institutions that insulate the bureaucracy because this establishes a commitment to reward competence. Political leaders insulate the bureaucracy if public good provision is important compared to rent extraction or when political competition forces the political elite to internalize the welfare loss caused by patronage. Through this channel political reforms can lead to reforms of the bureaucracy. The theoretical findings are illustrated with existing empirical studies and data on central bank independence. ; I acknowledge Önancial support from the Ramon y Cajal programme and Spanish Ministry of Economy and Competitiveness, through the Severo Ochoa Programme for Centres of Excellence in R&D (SEV-2011-0075) ; Peer Reviewed

This comment highlights different ways of coding crisis episodes in Cerra and Saxena (2008) (CS). The comment shows that the coding used for civil war implies a misrepresentation of its impact. A correct coding of civil war reveals that the average civil war leads to a loss in output of 18 percent. This makes civil wars more devastating than all other crisis studied by CS.

Abstract
Power-sharing agreements are used as a tool to reduce political violence in regions of conflict, but agreements are often followed by violence. This is due to the fact that such agreements are introduced during periods of political violence when a country is inside the conflict trap, which makes it difficult to distinguish the effect of the agreement from the political context that generates persistent political violence. In this study, we match pre-agreement conflict risk to estimate the effects of power-sharing agreements on violence using a difference-in-difference method. The results show that violence falls immediately after an agreement, with the effects strengthening over time. Comprehensive agreements tend to be particularly successful. We show that broader institutional changes that have their nucleus in the agreements are crucial elements explaining these large changes.

AbstractIn the absence of power-sharing, minority groups in opposition have powerful incentives to substitute the ballot with the bullet. In contrast, when power is shared among all major groups in society, the relative gains of sticking to electoral politics are larger for minority groups. After making the theoretical argument, we provide in the current paper an empirical analysis of the impact of power-sharing at the local level, making use of fine-grained data from Northern Ireland's 26 local district councils over the 1973–2001 period. We find that power-sharing has a sizable and robust conflict-reducing impact.

This article provides a new methodology to predict armed conflict by using newspaper text. Through machine learning, vast quantities of newspaper text are reduced to interpretable topics. These topics are then used in panel regressions to predict the onset of conflict. We propose the use of the within-country variation of these topics to predict the timing of conflict. This allows us to avoid the tendency of predicting conflict only in countries where it occurred before. We show that the within-country variation of topics is a good predictor of conflict and becomes particularly useful when risk in previously peaceful countries arises. Two aspects seem to be responsible for these features. Topics provide depth because they consist of changing, long lists of terms that make them able to capture the changing context of conflict. At the same time, topics provide width because they are summaries of the full text, including stabilizing factors. ; We thank the Barcelona GSE under the Severo Ochoa Programme for financial assistance. ; Peer reviewed

Countries with strong executive constraints have lower growth volatility but similar average growth to those with weak constraints. This paper argues that this may explain the relationship between executive constraints and inflows of foreign investment. It uses a novel dataset of Dutch sector-level investments between 1983 and 2012 to explore this issue. It formulates an economic model of investment and uses data on the mean and variance of productivity growth to explain the relationship between investment inflows and executive constraints. The model can account for the aggregate change in inflows when strong executive constraints are adopted in terms of the reduction in the volatility in productivity growth. The data and model together suggest a natural way of thinking about country-level heterogeneity in investment inflows following the adoption of strong executive constraints. ; Both authors thank the IGC for financial support. Mueller acknowledges financial support from the Ramon y Cajal programme, the MINECO/FEDER through project ECO2015-66883-P and the MINECO through the Severo Ochoa Programme for Centres of Excellence in R&D ( SEV-2015-0563). ; Peer reviewed

This article provides a new methodology to predict armed conflict by using newspaper text. Through machine learning, vast quantities of newspaper text are reduced to interpretable topics. These topics are then used in panel regressions to predict the onset of conflict. We propose the use of the within-country variation of these topics to predict the timing of conflict. This allows us to avoid the tendency of predicting conflict only in countries where it occurred before. We show that the within-country variation of topics is a good predictor of conflict and becomes particularly useful when risk in previously peaceful countries arises. Two aspects seem to be responsible for these features. Topics provide depth because they consist of changing, long lists of terms that make them able to capture the changing context of conflict. At the same time, topics provide width because they are summaries of the full text, including stabilizing factors.

Trabajo presentado en la Becker Friedman Institute Conference: Elections, Policymaking, and Economic Uncertainty, celebrada el 13 de septiembre de 2016 en Washington D.C. ; Countries with strong executive constraints have lower growth volatility but similar average growth to those with weak constraints. This paper argues that this may explain a strong reduced-form correlation between executive constraints and ináows of foreign investment. It uses a a novel dataset of Dutch sectorlevel investments between 1983 and 2012 to explore this issue. It formulates an economic model of investment and uses data on the mean and variance of productivity growth to explain the relationship between investment ináows and executive constraints. The model can account for the aggregate change in ináows when strong executive constraints are adopted in terms of the reduction in the volatility in productivity growth. The data and model together suggest a natural way of thinking about countryspeciÖc heterogeneity in investment ináows following the adoption of strong executive constraints. ; Both authors thank the IGC for financial support. Mueller acknowledges financial support from the Ramon y Cajal programme and Spanish Ministry of Economy and Competitiveness, through the Severo Ochoa Programme for Centres of Excellence in R&D (SEV-2011-0075). ; Peer reviewed

This article builds a microfounded model of cultural conflict. In this model, intrinsically motivated cultural leaders supply and interpret culture. Leaders have an incentive to amplify disagreement about cultural values. This leads to a clash of perspectives between cultures. The population benefits from the supply of culture but suffers if leaders amplify the clash of perspectives. The article discusses constraints to leader behavior and analyzes how economic factors affect the incentives of cultural leaders. Economic strength can lead to displays of cultural arrogance while economic integration between groups can hinder cultural alienation.

This article exploits data on the pattern of violence across regions and over time to estimate the impact of the peace process in Northern Ireland on house prices. After establishing a negative correlation between killings and house prices, we estimate the parameters of a Markov switching model with conflict and peace as latent states. We use the model to estimate the size of the peace dividend as captured in house price changes. (JEL D74, R23, R31)

This paper exploits data on the pattern of violence across regions and over time to estimate the impact of the peace process in Northern Ireland on house prices. We begin with a linear model that estimates the average treatment effect of a conflict-related killing on house prices .showing a negative correlation between house prices and killings. We then develop an approach based on an economic model where the parameters of the statistical process are estimated for a Markov switching model where conflict and peace are treated as a latent state. From this, we are able to construct a measure of the discounted number of killings which is updated in the light of actual killings. This model naturally suggests a heterogeneous effect of killings across space and time which we use to generate estimates of the peace dividend. The economic model suggests a somewhat different pattern of estimates to the linear model. We also show that there is some evidence of spillover effects of violence in adjacent regions.