By Dominic Rohner, Faculty of Business and Economics (HEC Lausanne), University of Lausanne and Center for Economic Policy Research (CEPR), and Alessandro Saia, Faculty of Business and Economics (HEC Lausanne), University of Lausanne
Armed conflict is a major obstacle to human happiness and prosperity. The most visible consequence of warfare is, of course, the human death toll, leaving millions of families shattered. But below this surface, the grim consequences of fighting go further. The economic cost is very considerable, with the average war leading to a total loss of about 15% of GDP, human capital accumulation is slowed down, inter-group trust is threatened, and psychological suffering and trauma become widespread.1
While academic research on conflict has boomed in recent years, the lion’s share of contributions has focused on factors that are well-suited for statistical analysis but that are difficult to modify by policymakers. In particular, while we know that ethnic diversity, adverse weather shocks and natural resource discoveries play a role in the occurrence of conflict, there are not many obvious policies that can modulate these parameters.
In contrast, key policy choices of governments related to the biggest areas of public activity have received only very limited attention. This is hardly surprising. Any quantitative appraisal of major government policies, such as, education, health or welfare state policies, faces important statistical challenges. In particular, given that these policies are endogenously chosen, one can think of many confounders that jointly determine, say, education spending and peace-building. For example, a benevolent and capable government may boost both education perspective and the scope for peace. Hence, if Singapore and Finland benefit from peace and good education outcomes, while, say, Libya and Somalia have a more dismal schooling performance and greater levels of political unrest, this may not reflect any causal impact of education on peace but could be entirely driven by the general quality of governance. Put differently, any positive correlation on the country-level between good education outcomes and peace may be spurious and not reflect any causal impact of education on peace. Continue reading
Can you name a famous African scientist?
When someone asks me to describe an ideal girl, in my head, she is a person who is physically and mentally independent, brave to speak her mind, treated with respect just like she treats others, and inspiring to herself and others. However, I know that the reality is still so much different from what I have in mind.
![Africa-Idea-[Converted]](https://oecddevelopmentdialogue.files.wordpress.com/2017/09/africa-idea-converted.png?w=254&h=254)
Over the last decade, Africa has witnessed the emergence of a dynamic start-up scene in some of its countries. The district of Yaba, in Lagos, Nigeria is one example. In Yaba, young educated people are supported by a network of incubators, accelerators and other support facilities. This entrepreneurship cluster has taken advantage of the nearby presence of many Nigerian higher education institutions, such as the Yaba College of Technology, the University of Lagos, or the Federal Science and Technical College for students and facilities.
Africa has failed to industrialise. At the same time, millions of young people are seeking jobs. Put one-and-one together and the answer seems to be that if these labour market entrants become entrepreneurs in industry then they can in one stroke create jobs and help Africa industrialise. Yet, optimising the nexus between entrepreneurship and industrialisation requires overcoming some vexing policy biases. These can be categorised as biases of over-estimation and biases of under-estimation.
