Beyond the Phoenix Factor: Consequences of Major Wars and Determinants of Postwar Recovery

The destructive effects of wars have substantial, lasting impacts on populations and the economy, and linger on long after the war has terminated. Despite this fact, research on the consequences of war in political science has been limited and has thus far produced contradicting results. This study explores the immediate and long term consequences of intrastate and interstate wars and the determinants of postwar recovery or decline for 47 of the most destructive wars during the period 1900-2010. The objective of this research is twofold. First, it aims to illuminate and clarify the theoretical and empirical contradictions regarding the evaluations of post war recovery, and ascertain whether there are any systematic recovery patterns countries follow after suffering severe wars. Second, by investigating the factors that influence recovery, it endeavors to explain why some countries recover after major wars whereas others suffer long term consequences and fall into a poverty trap. In order to shed light on the connection between costs of wars and the recovery process this study employs a variant of the Overlapping Generations (OLG) model developed by T. Kugler et al. (2013), which provides a generalized overarching theory that can successfully account for proficient recovery as well as absolute decline of nations. The analysis on the consequences of war reveals that all nations consistently achieve demographic recovery after severe wars. However, the story is not so consistent for the economic recovery. In line the anticipations of the OLG model, postwar economic recovery trajectories exhibit diverging patterns based on the initial development levels of the participants. Most developed nations recover like a phoenix from the immense destruction of severe wars within one generation. The least developed societies are likely to deteriorate in the aftermath of wars, falling into lasting poverty traps. Countries that belong to the middle development level may or may not recover based on their economic and political decisions. The analysis on the determinants of postwar recovery suggests that recovery is not purely and economic matter; political and demographic factors also play significant roles in the recovery process. This study has important implications for both academic and policy worlds by providing a generalized formal theory of postwar recovery that is supported with a comprehensive sample and the longest timeframe in the existing empirical literature of this scope. The results not only elucidate the demographic and economic consequences of severe conflicts and the determinants of recovery or decline; they also advance our understanding on the operation and interaction of political capacity with economic and demographic factors. The theoretical and empirical findings have direct applications on ongoing postwar challenges in countries such as Afghanistan, Iraq, or Syria.