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The Impact Initiative has closed. This website has now been archived and will no longer be updated.

Blog: Understanding the effect of conflict on people and households

Mar 2016

During the last decade, there has been a particular focus of research on the economic and social impact of conflict. The evidence that has emerged shows that armed conflict takes a heavy toll on development and the welfare of the population that are subject to such continued violence. While this is not surprising at all, it can be extremely devastating. Understanding the causes and implications of this type of violence on the individual and communities will only enable us to lessen the negative impact.

The transactions cost of armed conflict

Violence during armed conflicts causes destruction and limits market transactions. Public and private assets are destroyed, people are maimed or killed, and markets shrink as a result of higher transaction costs. In addition, people change their behavior to survive amid violence. Thus, instead of maximising profits, the population dedicates most of its effort on avoiding victimisation and increasing their chance of survival. Both dynamics decrease the income of the people living in conflict, push some families into poverty and create poverty traps difficult to overcome.

Evidence shows the negative impacts of violence on households and firms cause a drop in production through four broad channels:

1. Violence destroys public and private assets, thereby decreasing the productive capacity of the firms

2. Aggressions against the population erode human capital by killing and maiming as well as reducing school enrollment and deteriorating the health conditions of the population

3. Violent shocks reduce markets efficiency by contracting the supply of goods, increasing transactions costs and shrinking the size of trade networks

4. Conflict imposes additional costs beyond destruction. By increasing uncertainty and risk, conflict forces households and firms to change behavior to avoid being targeted or to minimize the potential losses after an attack. Firms are closed, agricultural producers prefer to cultivate crops of low risk and low returns and households use cattle to cover drops in income.

What does the next decade hold for conflict and development research?

More than ten years of economic research on these issues has contributed to understand how households and firms respond to conflict and the ensuing social and economic impacts. The challenges for the next decade:

  • Are to understand better how to minimise the negatives impacts once the conflict is over
  • Deter households and firms from persisting on behaviours adopted during conflict
  • Devise ways to reinforce the unexpected positive impacts of conflict
  • Identify and mitigate potential dynamics that may reignite conflict.


Answering these questions requires research on how the conditions of households and firms evolve during post-conflict periods; how conflict shapes institutions, creates new elite and reinforces old inequalities; how the end of conflict may produce new forms of violence, grievances and tensions; and how programs and investments may contribute not only to improve the economic conditions of the civil population but also to process of restitution and reconciliation.

Conflict is development in reverse. Ten years of economic research have convincingly demonstrated the economic and social impacts of conflict are considerable. Ahead of the ESRC-DFID Impact Conference next week, there is no better time to reflect on the lessons we have learnt, and plan for the future of our research. The next ten years of research will hopefully contribute to devise ways to minimise the negative impacts of conflicts and to avoid the new conflicts or the emergence of new forms of violence.

It is worth the effort.


The Impact Initiative blog posts are either from individual researchers or from major research programmes. Some of the blog posts are original source and are written by researchers and experts connected to the two research programmes jointly funded by ESRC and FCDO: the Joint Fund for Poverty Alleviation Research and the Raising Learning Outcomes in Education Systems Research Programme. Other blog posts are imported from related websites and programmes. 

The views expressed in these blogs reflect the opinions of each individual and may not represent the Institute of Development Studies, the University of Cambridge, ESRC or FCDO.


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