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The Challenge of Ugandan Reconstruction, 1986-98
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@MISC{Collier_thechallenge,
author = {Paul Collier and World Bank},
title = {The Challenge of Ugandan Reconstruction, 1986-98},
year = {}
}
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Abstract
Collier, Hoeffler and Pattillo (1999) provide estimates of how private wealth was held for 56 countries as of 1990 based on cumulating investment and capital flight since 1970. The figure reported here uses their data but measures the stock as of 1986. 6 The level of economic activity is reduced through two routes. The stock of physical and human capital is diminished by destruction, dissaving, and flight. Additionally, productivity is reduced by disruption and expenditure diversion. As shown in Table 2, per capita GDP declined by around 40% between 1971 and 1986. This severe decline was larger than is globally typical for periods of domestic conflict. Collier (1999) estimates that on average such conflicts reduce growth by 2.2% per annum relative to counterfactual growth. The Ugandan economy declined in absolute terms by 1% per annum, and given rapid population growth, counterfactual growth could scarcely have been less than 2-3%. Hence, either the Ugandan economy was atypically vulnerable to social disorder, or the disorder was severe even by the normal standards of civil war. Since, as we show below, subsistence agriculture is relatively invulnerable to disorder and Uganda had a large subsistence sector even prior to the outbreak of conflict, its economy should not have been abnormally vulnerable to disorder. Hence, the more likely interpretation is that Uganda suffered an unusually severe social collapse. The decline in aggregate expenditure was even more severe than the decline in output. Aid inflows ceased and the government was manifestly unable to borrow commercially. As foreign flows to the government ceased, an illegal outflow of private capital started. The composition of GDP is altered by social disorder because activities are affected differentiall...
Keyphrases
ugandan reconstruction social disorder counterfactual growth ugandan economy likely interpretation severe decline expenditure diversion caput gdp private wealth capital flight human capital economic activity illegal outflow absolute term annum relative foreign flow domestic conflict private capital rapid population growth severe social collapse subsistence agriculture large subsistence sector average conflict normal standard civil war aggregate expenditure
