Page 164 - Abhivruddhi

stock market is largely impacted due to the armed conflicts making it
evident that trade suffers as the nation plunges into the war. Both the
papers state the negative effects of the armed conflicts on the core
financial markets in the western world (stock market indices), exchange
rate and oil and commodity prices. As war affects civilian life on a very
large scale it is more aptly considered as a development issue. Gates S. et
al. (2012) explains the effect of armed conflicts (particularly civil wars) on
the United Nation’s Millennial Development Goals, MDGs. Along with
the GDP growth, they have also considered other development factors.
Detrimental effects of armed conflicts on poverty reduction, primary
education, infant mortality rate, land deprivation, undernourishment
and potable water are premeditated in detail.
Another way to divide war economy, combat economy- the
actual costs that the government incurs to achieve military
objectivesduringtheongoingconflict, Shadoweconomy- economic
activities that take place outside the regulatory framework of the state.
Most of the activities in the shadow economy possess the intention of
profit gaining through the ongoing conflict and the coping economy- that
refers to the indirect economic impact of the conflict on the state and
its population. Goodhand J. (2004) explains combat, shadow and coping
economy with respect to ongoing conflicts in Afghanistan.
Military expenditure is one of the primary costs that come into
picture while studying the costs of conflict. Militarisation: both social
(maintenance of armed forces) and economic (military expenditure) have
severe effects on civilian life chances. Carlton- Ford (2010), in his study,
examines the effect of Militarisation using the factor variable of child
mortality. The government spends on the military intending to contain the
war, participate if necessary as well as a precautionary measure. Aziz M.
N. and Asadullah M. N., (2016) have stated the negative effects of military
expenditure on economic growth. By analysing the data of 70 developing
countries, their study highlights the growth effects of the post- Cold war
armed conflicts and military expenditure in the developing context and
concludes that military expenditure harms the growth.
Apart from the global overview about the economic costs of violence,
research papers that review the impact of conflict on a particular region
have also been studied while forming this article to get a micro perspective
and understand conflicts on a regional level. E.g. Richani N., (1997)
analyses the political economy of violence in Columbia. Arunatilake N.
et al. (2001) in their research have assessed the economic costs associated

164