The welfare implications of COVID‐19 for fragile and conflict‐affected regions

• Published date: 01 November 2023
• Author: Chrysostomos Tabakis,Gi Khan Ten,David Newhouse,Utz Pape,Michael Weber
• Date: 01 November 2023
• DOI: http://doi.org/10.1111/rode.13022

REGULAR ARTICLE

The welfare implications of COVID-19 for

fragile and conflict-affected regions

Chrysostomos Tabakis

1

| Gi Khan Ten

2

| David Newhouse

3

|

Utz Pape

3

| Michael Weber

3

1

KDI School of Public Policy and

Management, Sejong-si, Republic of

Korea

2

College of Social Sciences, Keimyung

University, Daegu, Republic of Korea

3

The World Bank, Washington, DC, USA

Correspondence

Gi Khan Ten, College of Social Sciences,

Keimyung University, 1096 Dalgubeol-

daero, Daegu 42601, Republic of Korea.

Email: ten.andrey@kmu.ac.kr

Funding information

Korea Trust Fund for Economic and

Peace-Building Transitions (KTF)

Abstract

Understanding the ramifications of the COVID-19

pandemic for households' welfare in regions subject to

fragility, conflict, and violence (FCV) is important to

inform programs and policies in this context. Harmo-

nized data from high-frequency phone surveys indicates

that, at the onset of the pandemic, a higher fraction of

respondents in FCV regions relative to non-FCV ones

faced adverse household income changes and reported

to have stopped working since the outbreak of the crisis.

On top of that, households in FCV regions were far less

likely to have received government assistance than those

in non-FCV regions. These findings suggest that, at the

start of the COVID-19 pandemic, there was a widening

of the preexisting economic gap between FCV and non-

FCV regions, raisingthe recovery bar for the former.

KEYWORDS

conflict, COVID-19, household and individual welfare

JEL CLASSIFICATION

D31, D74, I31, O15

1|INTRODUCTION

The ongoing COVID-19 pandemic has profoundly affected economic activity and social interactions

around the globe. To combat the pandemic, governments introduced restrictions to socioeconomic

activity, and individuals adopted social distancing and modified their behavior in various

other ways. As past studies have shown (e.g., Bundervoet et al., 2022;Crossleyetal.,2021;

Received: 17 June 2022 Revised: 10 May 2023 Accepted: 12 June 2023

DOI: 10.1111/rode.13022

Rev Dev Econ. 2023;27:1977–2006. wileyonlinelibrary.com/journal/rode © 2023 John Wiley & Sons Ltd. 1977

Egger et al., 2021;andKugleretal.,2021), impacts both across and within countries have had

substantial heterogeneity. In this paper, we investigate whether the COVID-19 pandemic has

had differential welfare implications for subnational regions based on their fragility, conflict,

and violence (FCV) status. To address this question, we use comprehensive data on nearly

140,000 respondents in 21 countries from the World Bank's COVID-19 high-frequency phone

surveys (World Bank, 2021a).

1

A number of studies use survey data to explore the heterogeneity in the impacts of the COVID-

19 pandemic both across and within countries. Some of them focus on the experiences of developed

countries. For instance, Crossley et al. (2021) look at the United Kingdom and find that the lowest

income quantiles and minority ethnic groups faced the most severe labor market shocks in the first

wave of the pandemic (April–May 2020). Adams-Prassl et al. (2020) exploit real-time survey data

from the United Kingdom, the United States, and Germany collected in March and April 2020 and

demonstrate that, within countries, the impacts were highly unequal, exacerbating existing inequal-

ities to the detriment of women and less educated workers.

Other authors focus on the implications of the pandemic for developing countries. In partic-

ular, Egger et al. (2021) use survey data covering nine low- and middle-income countries in

Africa, Asia, and Latin America. They document pronounced declines in employment, income,

and food security in all nine countries in the early period of the crisis. Khamis et al. (2021) use

an early version of the high-frequency phone survey dataset to track overall labor market

impacts and find that, at the onset of the pandemic, labor markets in all regions included in

their study were adversely affected to a substantial degree. In a related paper, Kugler et al.

(2021) focus on the distributional implications of the crisis and show that female, less educated,

and younger workers were initially impacted more severely. Bundervoet et al. (2022) is probably

the paper closest to ours, as it considers a variety of welfare impacts beyond the ones on

employment and income. They demonstrate that the pandemic's initial effects were both wide-

spread and highly regressive, with the most vulnerable segments of the population being dis-

proportionally affected. However, none of the aforementioned studies focuses on FCV regions,

which may be particularly susceptible a priori to economic crises. Therefore, this study, which

explores the welfare implications of the pandemic for fragile and conflict-affected regions, fills

an important gap in the COVID-19 literature.

2

We contribute to the literature on the socioeconomic ramifications of crises in two important

ways. First, fragile and conflict-affected countries contain a significant fraction of the world's

poor.

3

In fact, according to the World Bank, up to two-thirds of the world'sextreme poor could be

living in FCV settings by 2030.

4

Given that economic crises are naturally most threatening to eco-

nomically vulnerable individuals or households, analyzing the implications of the pandemic for

FCV regions adds to our understanding about the channels through which crises affect the poor.

Second, the empirical study of socioeconomic conditions in “hot”conflict areas using household

survey data is rare since data collection there is inherently difficult (Blattman & Miguel, 2010).

The nature of the phone survey data used in this study enables us to make a significant contribu-

tion toward better understanding the welfare implications of crises for fragile and conflict-affected

areas. Furthermore, using high-frequency phone survey data totrack welfare changes in FCV set-

tings constitutes an approach that can be followed systematically in the future.

We first investigate the initial economic and social ramifications of the COVID-19 pandemic

for FCV versus non-FCV (subnational) regions by comparing outcomes at the onset of the crisis

between the two groups of regions. The overall picture emerging from the analysis is that FCV

regions were hit relatively harder by the COVID-19 crisis in its early months. In particular, we

find that FCV regions had a higher fraction of individuals reporting adverse changes in

1978 TABAKIS ET AL.