This paper examines the effect of macroeconomic volatility on anti-refugee violence in developing countries. The author focuses on exogenous commodity price shocks since commodity exports constitute a substantial share of national income for most developing countries and changes in world commodity prices are exogenous to each developing country. The analysis covers a sample of 98 low- and middle-income refugee-hosting countries between 1996 and 2015.
The author draws on data on commodity prices from Bazzi and Blattman’s (2014) dataset extended to 2015, and data on anti-refugee violence from the Political and Societal Violence by and Against Refugees (POSVAR) dataset (Gineste and Savun, 2019). The average host country in the sample is in Africa (half the country-year observations) and is poor (GNP per capita is US$2,400). Commodity exports constitute a substantial share of national income (26 percent). Violence against refugees is evident in seven percent of country-year observations, while violence between refugees is evident in three percent of country-year observations.
The paper summarizes the theories suggesting a link between recessions and anti-refugee violence. According to these theories, adverse commodity price shocks increase anti-refugee violence through a reduction in income and consumption (opportunity cost and realistic group conflict theory) and government spending (state capacity theory).
Main findings:
- Adverse commodity price shocks are associated with an increase in violence against refugees and violence between refugees. Adverse price shocks of agricultural commodities have a statistically significant effect on between-refugee violence, consistent with the fact that agricultural wage labor is the main source of employment for refugees in middle- and low-income countries. Mineral, oil, and gas price shocks do not have a statistically significant effect on violence against refugees.
- Consistent with opportunity cost and realistic group conflict theories, adverse commodity price shocks have a negative impact on GDP and private consumption.
- Consistent with state capacity theory, government spending is negatively affected by adverse commodity price shocks.
- Price shocks do not appear to influence general violence that targets all residents, including refugees (e.g., civil war). There is no statistically significant effect of adverse price shocks on battle deaths, civil conflict onset, or civil war onset.
- Price shocks do not appear to influence conflict spillover when refugees cross borders from conflict-affected neighboring countries. There is no statistically significant effect of adverse price shocks on battle deaths, civil conflict onset, or civil war onset in neighboring countries.
The author concludes that adverse commodity price shocks increase both violence of natives against refugees and violence between refugees; anti-refugee violence increases during recessions and decreases during economic booms. The author suggests implementing countercyclical social protection policies, to increase social assistance to refugees during recessions, to prevent an increase in anti-refugee violence.