Are fragile countries more susceptible to regional growth spillovers?

摘要

In this paper, I ask whether the economic performance of fragile countries is more affected by regional spillovers than that of more stable countries. State fragility implies weakness and vulnerability in that relatively minor shocks or conflicts can cripple highly fragile societies. However, there is no predominant theory regarding how weaker countries will respond to regional variables. Fragile societies may fall behind the world standard and thus be less integrated in the global economy, for instance, or they could be too preoccupied with domestic problems to adjust for international issues. I construct a panel of 160 countries from 1996 to 2010 to examine the size of regional spillover effects on high- and low-fragility countries, as defined by a new composite statistic called the State Fragility Index (SFI). I am specifically interested in spillover effects from regional education, governance and institutions, tourism, economic policy, and warfare. Controlling for a broad set of country-level characteristics, I find evidence that the size and sometimes even the direction of spillover effects from regional variables can be significantly different between low-and high-fragility countries. However, whether fragile countries are more susceptible to spillovers depends on the regional variable. Differences are most striking for the spillover effects of regional tourism and economic freedom on domestic economic growth, both of which change signs in highly fragile countries.