Working Paper

Covid-19 Fatalities and Internal Conflict: Does Government Economic Support Matter?

Mohammad Reza Farzanegan, Hassan F. Gholipour
CESifo, Munich, 2021

CESifo Working Paper No. 9352

In this study, we look at the association between COVID-19 fatality rate and internal conflict, highlighting the importance of government economic support under the pandemic as a moderating factor. Our main hypothesis implies that increased COVID-19 fatality rates are likely to be positively associated with internal conflict in countries with lower levels of government economic support. Our empirical analysis confirms this prediction: employing cross-country data for more than 100 countries, the estimation results demonstrate that the positive effect of COVID-19 fatality rates on internal conflict may become insignificant with higher levels of government economic support. In countries where government spending in response to the pandemic is less than 5 to 6% of GDP, there is a significant risk of internal conflict resulting from increased COVID-19 fatality rates. Our main findings hold when we control for the effects of other socio-economic determinants relating to pre-pandemic internal political stability and alternative measures of conflict.

CESifo Category
Public Finance
Public Choice
Keywords: Covid-19, conflict, political stability, fatality, fiscal measures
JEL Classification: D740, H510, H530