IZA DP No. 12650: Do Perceptions of Economic Well-Being Predict the Onset of War and Peace?
While economic deprivation is an important determinant of civil conflict, it cannot completely explain the incentives for warfare. In irregular wars, for example, both incumbents and insurgents may employ various tactics to win the hearts and minds of civilians in order to muster territorial control. This paper considers whether and to what extent civilian perception of economic well-being, possibly influenced by such tactics, predicts war and peace onset. Using unique data bracketing the onset of the Nepalese Civil War, we find that higher levels of perceived income adequacy are associated with later war onset during periods of rebel recruitment, and with earlier peace onset in general. These results hold regardless of whether we account for actual economic circumstance, and are especially strong among marginalised communities. Our results suggest that civilian perception of well-being ought to be considered seriously as a determinant of war and peace.