Economic Activity, Transboundary Water Resources, and Violent Conflict in the Middle East and North Africa

Abstract This study examines the relationship between economic activity, food production, and the incidence of violent conflict, using an instrumental-variable strategy to address potential endogeneity. Economic conditions are central to many theoretical explanations of violent conflict, yet their empirical estimation is complicated by endogeneity and reverse causality. To address this challenge, we employ climatic variables as instruments for economic and agricultural outcomes, exploiting exogenous variation in weather conditions to identify causal effects at the country level. We apply Probit and Instrumental Variable (IV) Probit models to a panel of 17 MENA countries, and we analyse the effects of GDP, food production indices, international aid, and natural resource rents on violent conflict incidence. We further extend the analysis using dyadic data to examine whether shared transboundary river basins are associated with a higher likelihood of violent conflict between country pairs. The results indicate that higher GDP, food production, and international aid are associated with a lower probability of violent conflict, whereas greater dependence on natural resource rents is associated with higher conflict risk. Moreover, conflict incidence tends to be higher in river-sharing basins, particularly where rivers cross national borders and involve upstream-downstream asymmetries. These findings highlight the importance of economic stability, food security, and cooperative water governance in mitigating violent conflict in the MENA region.