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Lake Chad Regional Economic Memorandum: Technical Paper 3. Estimating the Spillover Economic Effects of Foreign Conflict - Evidence from Boko Haram(World Bank, Washington, DC, 2021-11-12) Jedwab, Remi ; Blankespoor, Brian ; Masaki, Takaaki ; Rodríguez-Castelán, CarlosViolent conflicts present a formidable threat to regional economies. Throughout the world, border regions in many countries are possibly impacted by the cross-border economic effects of regional insurgencies in neighboring countries or national state failures, i.e. "bad neighbors". This raises two questions. First, what is the magnitude of the spill-over economic effects of foreign conflict and what are the channels through which they operate Second, what policies can governments adopt in the potentially exposed regions to mitigate such spill-over effects. In this paper, we adopt a difference-in-difference (DiD) framework leveraging the unexpected rise of the Boko Haram insurgency in Northeastern Nigeria in 2009 to study its economic effects in neighboring areas in Cameroon, Chad and Niger that were not directly targeted by Boko Haram activities. We find strong cross-border economic effects that are likely driven by reduced trade activities, not the diffusion of conflict. Factors of local economic resilience to this foreign conflict shock then include trade diversification and political and economic securitization. More generally, conflicts, if they have regional economic effects, may necessitate regional responses.
Publication(World Bank, Washington, DC, 2021-11-09) Granguillhome, Rogelio ; Hernandez, Marco ; Lach, Samantha ; Masaki, Takaaki ; Rodríguez-Castelán, CarlosThis report sheds light on the interlocked long-term territorial development challenges and the recently realized systemic risks affecting the Lake Chad region. It summarizes the findings of seven technical papers, each investigating different aspects of the interlinked challenges faced by the region. These studies are accompanied by complementary research on labor market and geospatial socioeconomic trends, as well as by a review of the thin literature on economic development across the region. In addition to presenting the main results of the technical papers, the report positions the findings in the broader context of an analytical framework depicting the feedback mechanisms between the region’s territorial development gaps and the self-reinforcing link to shocks, namely, violent conflict and climate change. This analytical framework is presented in Section 1.2. The rest of the report is structured as follows. Section 1.3 describes the main social and economic trajectories in the region. It reviews long-term demographic trends, suggesting. Section 1.4 argues that the low-growth, high-poverty equilibrium observed in the region is closely linked to the region’s economic geography. Section 1.5 discusses how the impact of climatic variation and violent conflict experienced in the region interlink with and exacerbate the territorial development challenges. Section 1.6 presents policy directions structured around four crosscutting themes: infrastructure, trade, governance, and natural resource management. The crosscutting nature of these themes encourages the exploration of potential synergies across challenge areas. The discussion in the section aims to inform policy-making efforts to strengthen territorial development and mitigate the impacts of conflict and climate change. Such endeavors can increase the likelihood of breaking free from the self-reinforcing negative mechanisms and boost the potential return of the region to a path of stability and inclusive economic development.
Lake Chad Regional Economic Memorandum: Technical Paper 1. Socioeconomic Trends in the Lake Chad Region(World Bank, Washington, DC, 2021-11-09) Masaki, Takaaki ; Rodríguez-Castelán, CarlosThe Lake Chad region, which is an economically-and socially integrated area spanning across four countries of Chad, Cameroon, Niger, and Nigeria in north-west Africa, has been trapped in a vicious circle of suboptimal territorial development and fragility. This note shows that the Lake Chad region lags in multiple dimensions of development ranging from poverty, human capital, and access to services. A poverty rate in the Lake Chad region is found to be much higher than other parts of the countries surrounding the lake. The regional poverty rate in the Extreme North region of Cameroon (59 percent) is three times higher that of the rest of the country (19 percent). In Nigeria, the Lake Chad region203 has a poverty rate (72 percent) nearly twice as high as in the rest of the country (38 percent). Chad is the only exception, where the poverty rate in the country’s Lake Chad region (31 percent) is lower than the rest of the country (40 percent).204 This is explained by the fact that the Chad region around the lake lies near the capital of the country, with a consequently higher urbanization rate and a relatively high population density. The note is organized as follows. Section 2.2 provides key statistics on poverty, sector of work, and human capital indicators in the Lake Chad region vis-à-vis other parts of the country and examine how the Lake Chad lags behind in different dimensions. Section 2.3 provides a diagnostic of economic geography with a focus on three dimensions of density, distance and division. Section 2.4 identifies a set of structural factors, aggregate shocks and selected policies that might be associated with the dynamics of economic activity and social inclusion across the region.