CIDAM - Conflict, Identity and Markets

Eliana La Ferrara

Eliana La Ferrara
Principal Investigator

November 2016-October 2021
Grant Agreement ID: 694882


The developing world has been plagued by many civil conflicts in the past thirty years. Understanding the roots and the consequences of these conflicts is crucial to fight poverty. This project will take an economic approach to investigate the interplay between cultural, political and economic determinants of conflict in poor countries.

I will assess the role of domestic and international factors. Domestic factors include variables such as cultural identity, income inequality, resource endowments and geography. I will re-examine the role of ethnic diversity using original multi-dimensional indicators. These take into account that the salience of ethnic identity may depend on how much it overlaps with categories based on income, education, etc. I will also re-assess the role of natural resource abundance from a theoretical and empirical standpoint, using detailed geographic information on the location of mineral deposits in Africa.

I will also analyze the role of international players using a methodology based on financial markets’ reactions to news. This methodology will allow me to address questions such as: Which companies gain or lose from violent conflict? How can we detect violations of international embargoes? What are the private incentives of complying with international norms, i.e. can reputation costs be quantified? These are questions of paramount importance from a policy perspective and on which almost no academic research exists in economics.

Overall, the project should help integrate economic, social and political explanations for the occurrence of conflict in developing countries. I expect that its outcome should comprise the creation of new datasets, propose new methodological tools and offer some insights for designing economic policies to prevent conflict and fight poverty.

Articles in international journals

Self-Help Groups and Mutual Assistance:  Evidence from Urban Kenya” (with M. Fafchamps), Economic Development and Cultural Change, 60(4), 707-733, 2012.
A Generalized Index of Fractionalization” (with W. Bossert and C. D’Ambrosio), Economica, 78(312), 723-750, 2011.

Detecting Illegal Arms Trade” (with S. DellaVigna), American Economic Journal: Economic Policy, 2(4), 26-57, 2010.

The Economic Effects of Violent Conflict: Evidence from Asset Markets Reactions” (with M. Guidolin), Journal of Peace Research, 47(6), 671-84, 2010.

Reviews and Chapters in books

“Financial markets and conflict in the developing world”, in T. Besley and R. Jayaraman (eds.), Institutional Microeconomics of Development, MIT Press, 2010, ch. 3.

Working Papers

Conflict, Climate and Cells: A Disaggregated Analysis” (with M. Harari), CEPR Discussion Paper , 2013

A Test of Racial Bias in Capital Sentencing” (with A. Alesina), NBER Working Paper 16981, 2011.

Racial Segregation and Public School Expenditure”, (with A. Mele), mimeo, Bocconi University, 2009, under revision.
"Does interaction affect racial prejudice and cooperation? Evidence from randomly assigned peers in South Africa", (with J. Burns and L.Corno), preliminary draft, July 2013

Datasets and Programs

Data and Programs to replicate DellaVigna and La Ferrara (2010)

Data for Guidolin and La Ferrara (forthcoming)

Programs for replicating results in Guidolin and La Ferrara (forthcoming)

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This project has received funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme.