Are Silent Shocks the Loudest?: How Communication Technology Moderates the Relationship between Price Shocks and Militant Formation

Abstract

This study aims to answer a central question: how does an actor's information environment and level of communication technology (CT) influence his decision to pick up arms against the state? Using a panel of 116 countries from 1970-2007, this paper utilizes a two-way fixed effects Linear Probability Model (LPM) and leverages an exogenous commodity price shock index to study both the direct relationship between CT and militant formation and how CT moderates the relationship between price shocks and militancy. By focusing on the mobilization stage of conflict, this study is able to extract novel results. Our analysis finds that, contrary to findings with regards to terror attacks, there is no direct robust systematic relationship between CT growth and mobilization risk. CT does matter, however, through its interaction with the impact of price shocks. Across an array of regressions, we find that negative commodity price shocks have their effect muted when CT is higher. This mitigating effect is generally statistically significant at the 5% level (when we focus on contemporaneous price shocks) and at the 10% level (when we use 3-year moving average of price shocks). Moreover, a thorough heterogeneity analysis reveals that the mitigating effect of CT is larger, in terms of both magnitude and precision, for center-seeking militant groups and in recent years marked by increased globalization. Overall, this paper extends understanding of the economics of conflict by finding a crucial moderating influence of CT on the risk of anti-state militancy during economic downturns.