infonet-economy

We study the effect of civil conflict on social capital, focusing on the experience of Ugandaduring the last decade. Using individual and county-level data, we document large causal effects on trust and ethnic identity of an exogenous outburst of ethnic conflicts in 2002-05. We exploit two waves of survey data from Afrobarometer 2000 and 2008, including information on socioeconomic characteristics at the individual level, and geo-referenced measures of fi ghting events from ACLED.Our identifi cation strategy exploits variations in the intensity of fighting both in the spatial and cross-ethnic dimensions. We fi nd that more intense fighting decreases generalized trust and increases ethnic identity. The effects are quantitatively large and robust to a number of control variables, alternative measures of violence, and different statistical techniques involving ethnic and spatial fi xed effects and instrumental variables. Controlling for the intensity of violence during the conflict, we also document that post-conflict economic recovery is slower in ethnically fractionalized counties.Our findings are consistent with the existence of a self-reinforcing process between conflicts and ethnic cleavages.