Angola after the civil war: quantifying the peace dividend using the synthetic control method

This study estimates the impact of peace on economic outcomes in Angola after the civil war ended in 2002. Using the synthetic control method and panel data covering the period 1976-2020, Angola is compared to a data-driven counterfactual which mimics the country’s socioeconomic characteristics during the pretreatment period. The analysis examines sectors such as agriculture, manufacturing, and services as well as macroeconomic indicators such as foreign direct investment, exports, employment, and consumption as potential channels through which peace may have affected economic performance. Results indicate a large and persistent peace dividend: post-war GDP per capita diverges markedly from the synthetic benchmark and is estimated to be over 40 percent higher on average during 2002-2020 than under the counterfactual. Robustness checks, including placebo tests, leave-one-out exercises, and alternative donor pools, suggest that the findings are not driven by chance or model specification. Overall, the findings highlight the high economic costs of conflict and suggest that the transition to peace was associated with sustained improvements in economic performance, while recognising that these gains occurred within a broader post-2002 macroeconomic environment, including favourable oil market conditions. These results provide important guidance for policymakers seeking long-term stability and growth in post-conflict economies.