Item Details
Skip Navigation Links
   ActiveUsers:2181Hits:20990037Skip Navigation Links
Show My Basket
Contact Us
IDSA Web Site
Ask Us
Today's News
HelpExpand Help
Advanced search

In Basket
  Journal Article   Journal Article
 

ID186863
Title ProperCentral banks and civil war termination
LanguageENG
AuthorGarriga, Ana Carolina
Summary / Abstract (Note)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 article posits that the design of central banks should affect civil war termination. In particular, it argues that central bank independence affects civil war termination through two channels. First, financial markets consider central bank independence 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, central bank independence 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, central bank independence is associated with a substantial increase in the likelihood of war termination. When the form of termination is disaggregated, (higher) central bank independence 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.
`In' analytical NoteJournal of Peace Research Vol. 59, No.4; Jul 2022: p.508–525
Journal SourceJournal of Peace Research Vol: 59 No 4
Key WordsInternational finance ;  Inflation ;  Central Bank Independence ;  Central Banks ;  Civil War Termination ;  Conflict Finance


 
 
Media / Other Links  Full Text