The fatal attraction of civil war economies: foreign direct investment and political violence. A case study of Colombia

Civil war acutely inhibits economic growth, according to a prominent set of civil war literature. However, recent scholarship observes that Foreign Direct Investment (FDI), considered a central vehicle of growth, is entering countries with internal armed conflicts unabated. Furthermore, some civil war economies exhibit substantial increases in FDI during conflict. According to this scholarship, FDI enters conflict zones in spite of violence. This article contrastingly adopts a critical framework acknowledging the often violent characteristics of globalised capitalism. By analysing Colombia’s oil industry (the country’s largest sector of FDI), this article suggests that civil war violence can create conditions that facilitate FDI inflows. More specifically, this article posits that violence perpetrated by armed groups sympathetic to the interests of the oil sector – namely, the public armed forces and right-wing paramilitaries – have facilitated FDI in Colombia’s oil sector. In particular, processes of forced displacement and violence against civilian groups have served to protect economically important infrastructure and have acquired land for oil exploration. Moreover, civilian groups deemed inimical to oil interests have been violently targeted. By using disaggregate-level data on the conflict in Arauca, an important oil producing region of Colombia, this case study indicates that intensifying levels of civil war violence in areas of economic interest are followed by increases in oil production, exploration and investment

Modernization vs. Dependency Revisited: Effects of Foreign Direct Investment on Food Security in Less Developed Countries

Food security is of great urgency in the developing world. Many countries have sought to attract foreign capital to promote development and reduce hunger. But how do foreign direct investment (FDI) inflows affect food security? Extant research based on dependency and modernization arguments or the globalization debate offers contradictory theoretical predictions and produces conflicting evidence. We resolve the puzzle by disaggregating FDI. Foreign investments in distinct economic sectors have disparate attributes, producing different welfare consequences for food security. We test our arguments using the food security indicators recommended by the Food and Agriculture Organization (FAO) and new data on sector-specific FDI inflows to 56 developing and transition economies between 1981 and 2001. We find highly robust evidence that manufacturing FDI improves food security. We also find that primary-sector FDI reduces food security and that service-sector FDI has an ambiguous but sometimes negative effect. These results are largely robust under different statistical methods, additional control variables, and alternative measures of food security. Our research offers policy lessons for how to improve food security and demonstrates how to resolve theoretically the long-standing dependency-modernization controversy that has informed the contemporary debate between the pro- and anti-globalization camps

The effect of warfare on the environment

Does warfare affect the environment? This question has received some theoretical and empirical attention, but none of the extant studies has employed large-N statistical models. This article theorizes the possible effects of warfare on the environment and estimates large-N statistical models of these effects on CO2 emissions per capita, NOX emissions per capita, the rate of change in forested area, and a composite indicator of environmental stress reduction. The results indicate that warfare significantly affects the environment, but the signs and sizes of these effects depend on the environmental attribute (whether the fighting is at home or abroad) and development (whether the fighting country is developed or less developed). Warfare reduces CO2 emissions, but the effect is weaker in less developed countries (LDCs) than in developed countries (DCs). Warfare increases deforestation when fought at home and promotes forest growth when fought abroad, particularly in the LDCs. Warfare at home reduces NOX emissions for the LDCs and increases them for the DCs; warfare abroad increases NOX emissions for both the DCs and LDCs. Finally, warfare increases aggregated environmental stress, particularly for the LDCs when fought at home and for the DCs when fought abroad. The sizes of these effects are on par with or larger than the mandated or recommended policy goals stated by the US government for changes in CO 2 and NOX emissions, and by the World Bank (and by implication the DCs driving its policy) for the rate of deforestation, during the coming decade.multidimensional; policy implications; statistical models; theory