Conflict and Private Enterprise Activity in Low-Income Countries

Violent Conflict has numerous negative effects on private entrepreneurial activity and, as a consequence, on economic development. The authors show that even when we observe resilience of entrepreneurial activities in countries experiencing conflict (entrepreneurship increases with conflict), this is a sign of regressive structural change: a country moves towards low capital intensive and subsistence activities. However, entrepreneurial resilience may work as a foundation for post-conflict reconstruction and economic development.