VJE Seminar: Elias Papaioannou (London Business School)

Jun 01, 2017, 13:15 - 14:45, University of Vienna, Oskar-Morgenstern-Platz 1, 1090 Vienna (VGSE seminar room, 3rd floor)

Land Mines and Spatial Development

Elias Papaioannou (London Business School)

Abstract: Land mines are a uniquely savage in modern warfare remaining on the ground long after the cessation of hostilities. Nevertheless, little (if any) research exists on the consequences of land-mine clearance. In this paper we explore the economic consequences of landmine clearance in Mozambique, the only so-far heavily-mined country (at the end of warfare in 1992), that has been officially declared land-mine-free in 2015. Our analysis proceeds in five steps. First, we describe the self-collected geo-referenced data on land mine contamination and their subsequent clearance during 1992-2015. We are able to provide for the first time to the Mozambican government, the United Nations, and the various NGOs involved in the demining process, an almost complete documentation of this gigantic and often chaotic process that lasted more than two decades. We also examine the correlates of the distribution of minefields at the end of the war and the timing of removal. Second, we exploit variation in the timing of demining across localities to assess its impact on economic activity, as reflected on satellite images of light density at night. We compare Mozambican localities, where demining took place in a given period, to those that either had no land mines at the end of the civil war or were mined but not cleared yet. The difference-in-difference specifications reveal small-to-moderate effects on local development. Third, we examine the heterogeneous impact of land mine clearance to shed light on the mechanisms and offer some guidance to ongoing demining activities at other parts of the world. Local trade hubs and larger cities benefit more whereas demining agricultural areas allows for a reallocation of farming activity towards more fertile areas. Fourth, we examine the nation-wide implications of land mine clearance recognizing the fact that removal of land mines in one locality may impact other regions through the transportation network. To do so we identify how the process of land-mine clearance reconfigured the accessibility of the pre-existing transportation network over time and apply a "market-access" approach that quantifies the aggregate effects of land mine clearance on spatial development. This method, derived from general equilibrium trade theory, quantifies both direct and the indirect effects (stemming from changes in the network structure) of land mine clearance and opening of roads and railroads on economic activity. The estimates reveal an economically large and statistically precise impact of land mines removal on aggregate economic development. To improve on identification we focus on localities which were spared from any landmine contamination at the end of the civil war. For these places, changes in the market access via the transportation network stem from landmine clearance in other regions. And we also estimate the market-access development link using only interventions affecting the limited colonial road-railroad network. Fifth, we perform counterfactual policy simulations to estimate the likely gains of demining if it was centrally coordinated and strategically planned targeting the key colonial development “corridors” or the roads connecting the three main ports. We also approximate the gains if demining was targeting the main hubs of the infrastructure system using an “optimal node” network algorithm. Our analysis reveals large gains from the presence of central planning and strategic coordination among the demining operators.

joint work with Giorgio Chiovelli and Stelios Michalopoulos