The Economic Effects of Civil War: Evidence from Chinese National Railroads, 1906 - 1923 by Dan Li :: NEUDC 2007 Papers :: Northeast Universities Development Consortium Conference :: Center for International Development at Harvard University (CID)

During the Later Qing Dynasty and so-called “Warlord Period” (1906-1923) China suffered from numerous and violent internal conflicts, or “civil wars”. These conflicts are thought to have slowed the pace of economic development and, especially, growth in infrastructure. I study these alleged impacts using a new panel data set linking archival data for Chinese railroads to detailed information on civil wars. I show that conflict had negative effects on business passenger flows, operative revenue, and investment, with the latter operating primarily through Tobin’s Q. These effects occurred during the same period as the conflict, but also persisted after the fighting had stopped. My findings suggest that, in the absence of internal strife, China would have experienced more rapid growth during a crucial phase of its modern economic history.