Lost in Transition? How Civil War Violence Can Impair the Foundations for Market Development - the Case of Tajikistan
Abstract: We carried out experiments and survey in Tajikistan on 426 randomly selected subjects 13 years after the end of the 1992-1997 civil war to investigate the effects of conflict-related violence on social and economic preferences. Our results indicate that exposure to warfare violence is strongly associated with the disruption of those kinds of social norms that are at the very foundation of market development. Conflict exposure destroys local trust and fairness, decreases the willingness to engage in impersonal exchange and reinforces kinship-based norms of morality. At the same time, we find evidence that trust, generosity and egalitarianism are at the highest among the mostly affected individuals when matched with a distant partner, in accordance with a growing body of literature showing surprisingly positive outcomes for social behavior in the aftermath of very traumatic events. The robustness of the results to the use of pre-war controls, village fixed effects and alternative samples suggests that selection into victimization is unlikely to be the factor driving the results.