ECONOMICS OF warfare - Essay Example

Difference-indifferences estimator is used in econometrics to investigate how changes in variables in the environment affect the macroeconomics. Armed conflict is one of the factors that affect economic growth and development. A number of studies have been carried to establish the adverse effect of armed conflict on the economy of a nation. The researchers have been using the difference-in-differences idea to try to understand the significance of armed conflict on the outcome of an economy (Wooldridge, 2009).

Armed conflict has serious economic implications. Historically, wars have destroyed economies that were robust and were promising. The world wars were unfortunate occurrences that brought the world economies into an economic crisis. Although most countries recovered for the fiasco, conflicts persist especially in African countries. Rwanda is one of the countries that were worst hit by armed conflict. The enmity between the Hutu and Tutsi saw the world witness one of the deadliest genocides. The two ethnic communities fled their country to go and seek asylum in neighboring countries.

Property was destroyed. Lives were lost. Consequently, the within a short period, the country’s economy was on the verge of being bedridden. Intervention from the international community and other humanitarian agencies mitigated the conflict that had threatened to escalate to uncontrollable levels. Due to the intervention, salinity was brought in the country. Development partners and non-governmental organizations flocked the state with an objective of aiding them recover from the aftermath of the armed conflict.

Furthermore, Rwanda became a case study of economists who started investigating the implication of the War on Rwanda’s economy. The World Bank is among one those development partners that examined the impact of the event. Researchers of the study used the