TY - BOOK ID - 85505381 TI - The Fiscal Cost of Conflict: Evidence from Afghanistan 2005-2016 PY - 2018 SN - 1484376714 1484376692 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Fiscal policy. KW - Tax policy KW - Taxation KW - Economic policy KW - Finance, Public KW - Government policy KW - Econometrics KW - Macroeconomics KW - Public Finance KW - Fiscal Policy KW - International Conflicts KW - Negotiations KW - Sanctions KW - Structure, Scope, and Performance of Government KW - Illegal Behavior and the Enforcement of Law KW - Estimation KW - Taxation, Subsidies, and Revenue: General KW - Price Level KW - Inflation KW - Deflation KW - National Government Expenditures and Related Policies: General KW - Public finance & taxation KW - Econometrics & economic statistics KW - Estimation techniques KW - Price controls KW - Revenue administration KW - Public expenditure review KW - Revenue sharing KW - Econometric analysis KW - Prices KW - Expenditure KW - Taxes KW - Econometric models KW - Revenue KW - Expenditures, Public KW - Afghanistan, Islamic Republic of UR - https://www.unicat.be/uniCat?func=search&query=sysid:85505381 AB - I use a monthly panel of provincially-collected central government revenues and conflict fatalities to estimate government revenues lost due to conflict in Afghanistan since 2005. I identify causal effects by instrumenting for conflict using pre-sample ethno-linguistic share. Headline estimates are very large, implying total revenue losses since 2005 of $3bn, and future revenue gains from peace of about 6 percent of GDP per year. Reduced collection efficiency, rather than lower economic activity, appears to be the key channel. OLS estimates understate the causal effect by a factor of four. Comparing to estimates from Powell’s (2017) generalized synthetic control method suggests that this bias results from omitted variables and measurement error in equal share. The findings underscore the considerable economic loss due to conflict, and the importance of careful identification in measuring this loss. ER -