Much attention has been paid to the potential role that climate and food security has on conflict, especially in the Middle East. However, there has been little critical examination beyond the statistical correlation of events, which demonstrates whether a causal link exists and if it does, what can be done about it. This paper explores the conceptual linkages between food and conflict and attempts to draw attention to the opportunity cost of conflict as the nexus for decision-making in this context.
The impact that the water-food-climate nexus has on the potential for conflict has become an acutely important issue. An article by Kelley et al. (2015) garnered significant media attention during 2015 and continues to be the main source for political rhetoric on the subject. The article argues that an extensive drought (ostensibly brought on by climate change) in Syria resulted in massive crop losses, migration, and the rise of groups like Jabat Al-Nusra, which are attempting to assert control through insurgency and armed conflict. The argument has merit. After all, hungry people are angry people, and these authors are certainly not the first to argue that migration (due to climate change) can facilitate violent conflicts (Findley 1994; McLeman and Smit 2006; Raleigh and Urdal 2007; Raleigh, Jordan, and Salehyan 2008; Barnett and Adger 2007).
But is the relationship really as simple as Kelly et al. (2015) make it out to be? Like most issues, simple hypothesized causal chains are insufficient to capture the complexity of the relationships that drive events. First, those simple chains do not address bi-directional causality (or even the effects of causal variables on each other). Second, they do not address intervening factors that make the hypothesized causal relationships more or less likely to hold in the real world. The literature in this area focuses on statistical relationships between proxy variables using standard econometric methods while ignoring important contextual factors that mainstream literature on the causes of political violence have found crucial for understanding the processes that facilitate violent conflicts.
We argue here that we need to shift our focus towards the formation of more sophisticated explanatory models of conflicts that include socio/political factors that will go beyond post hoc examinations of statistical association, and will combine both agronomic and socio/political factors. This approach, which focuses on the interaction between root causes and facilitating factors of conflict, will help policy-makers and practitioners to build systems that are resilient rather than trying to predict the next event.
This contribution is a call to new research. Necessarily, we employ conjecture and open hypotheses to stimulate new directions in research that have a more consequential impact on policy. Our goal is to synthesize a very disparate body of literature across several fields and provide clearer insights into the causes of conflict. For clarity of presentation, we focus on the water-food-climate (WCF) nexus as the trigger event causing individuals to consider conflict. However, it is how this trigger impacts the opportunity cost calculation that is at issue.
Redefining the Literature
We attempt to shed light on some of these complex issues by first exploring the most commonly-occuring pathways from WCF to conflict. The typical causal pathways often used to draw linkages between climate change and conflict are manifested in significant real-world feedback loops, which makes identifying directions of causality difficult at best. In the following subsections, we take the existing literature on these pathways and recast it through the lens of our key variables of interest: migration, economic well-being, grievance, and government legitimacy.
Households in developing countries are presumed to adapt to climate change and acute weather events by migration, among other strategies. The pathways between natural resource degradation and migration have become increasingly relevant as the number of people potentially affected by climate change has increased. For example, water scarcity in Africa and Asia is expected to cause an estimated 250 million environmental refugees by 2020 (Piguet 2011). Indeed, in 2011, 2.3 million Somali refugees were forcibly displaced in the Horn of Africa due to the worst drought in 60 years;.almost one million refugees fled to Kenya, Ethiopia, and Djibouti (United Nations High Commissioner for Refugees 2014). While Somalia ranked first in the Failed State Index for 2011, neighboring states were not far behind, and the influx of migrants only exacerbated resource scarcity issues in those nations (Fund for Peace 2011).
The civil war in Syria and the rise of Jihadi/rebel groups is a recent and stark example of the potential impacts of migration (Kelley et al. 2015). As a severe drought set in across Syria in 2006/2007, the country’s agricultural system disintegrated. Most farmers and herders faced zero or negative (death loss) production rates in 2008. With the Assad government unable or unwilling to provide a safety net for these farmers, migration to urban areas became the only recourse for most. An estimated 1.5 million Syrians joined the swelling Iraqi refugee population in Syria's largest cities including Damascus, Aleppo, Homs, and Latakia (Kelley et al. 2015; Ali 2010). Comprising as much as 20% of the population in these urban areas, the refugee community lived in sub-standard housing, faced rampant unemployment, and received little, if any, support from the government. These communities, not surprisingly, became the fountainhead of the Syrian revolution.1
The narrative of food insecurity causing conflict through migration is appealing, and in some cases appears to carry weight. However, this is obviously not the whole story. If it were, the High Plains of America would be embroiled in a bloody civil war following what has now been years of record drought. The fact that similar meteorological circumstances in Aleppo, Syria, and Lubbock, Texas bring about such varied outcomes requires us to dig a bit deeper into issues that may cause both food insecurity and conflict.
Economic Well-Being (Food Prices and Poverty)
Food price (and volatility) is often postulated as being a root cause of conflict, but figure 1 shows some issues with this hypothesis. From 1990–1995, social conflict appears to be falling as food prices are rising. Over a later period (and using different conflict data), Bellmare (2015; see figures 2–5 in his paper) shows that only substantially large spikes in food prices are associated with spikes in conflict. This leads to Bellmare’s conclusion that levels, not volatility, are associated with conflict. Interestingly, in earlier periods on his figures we see the same lack of association between food price levels and conflict as in our figure 1.2
On its surface, the relationship between food prices and conflict seem to make sense. In the poorest nations around the world, households spend a disproportionate amount of their income on food. As such, volatility in food availability and high prices relative to income can generate social upheaval (Bellemare 2015).3 In the winter of 2010–11, food insecurity, as measured by the Food and Agricultural Organization of the United Nations (FAO), reached an historic peak (FAO 2011). At the same time, the Middle East and North Africa (MENA) region experienced a wave of violent, history-altering revolts. This confluence of events inspired a number of pithy news articles identifying the “seeds” of conflict, or human insecurity, as having been sown in the soil of food insecurity (Miller and Ansari 2015).
The term “conflict” is broader than “war.”4 Food insecurity is related to armed conflict as well as civil disobedience, riots, and other forms of political and social violence (Salehyan et al. 2011). These authors note that while Kenya never experienced an intra- or inter-state war from 1990–2009, over 4,000 Kenyans died in food-related riots and communal conflict during that time.
As defined, the correlation between food insecurity and intrastate conflict seems reasonable and the literature provides some statistical backing to this claim. The majority of the world's food-insecure population lives in India, China, the Democratic Republic of Congo, Bangladesh, Indonesia, Pakistan, and Ethiopia (FAO 2011); of these, all but China have seen food-related civil conflict in the past decade. Several researchers have found higher rates of conflict in areas with lower caloric intake and poor nutrition (Pinstrup-Andersen and Shimokawa 2008; Sobek and Boehmer 2009), suggesting that existing poverty also compounds the effect of food price spikes.
Are food security and violence sensitive to income? One study found that the ratio of violent to non-violent food price-related protest was consistently higher in low-income countries (von Braun 2008). At the same time, Bellemare (2015) found that while food price levels have been associated with unrest, price volatility does not appear to have a significant impact. Taken together, this body of research suggests a significant general correlation between food insecurity and conflict at the societal level, leading to a general conclusion that food insecurity is the cause of conflict.
The studies mentioned so far analyze the correlations between food security/price and conflict on an aggregate level (focusing on community/collective behavior); hence, they are missing important dimensions related to the linkages between food security and individuals’ behavior in the context of violent political conflicts. Developing relevant models can clarify the various factors that contribute to the individual’s decision to engage in violent political activism. In this context, theories that potentially link hunger and conflict are plentiful, but not necessarily as empirically clear.
Grievance and Government Legitimacy
The political violence literature provides several theoretical approaches for explaining individuals’ tendency to join militant political groups and some of them can be linked directly to the issue of food security. The first approach argues a positive correlation between “political efficacy” (the ability to acquire and internalize information and data related to political processes) and the likelihood of political activism (Rosenstone and Hansen 2002). Because political efficacy is highly correlated with high levels of human capital and access to material resources, it seems that a lack of food security, which undermines individual’s resources (free time, financial freedom) should actually discourage or prevent individuals from joining militant groups (Benmelech and Berrebi 2007; Krueger and Malečková 2003). While this approach may be able to explain some manifestations of political violence in developed countries, it fails to gain significant empirical support, and even supporting studies were criticized for their methodological deficiencies (Perliger, Kohler-Derrick, and Pedahzur 2015).
Hence, it is not surprising that a more prevalent approach argues for a negative correlation between material resources and militant political activism. This approach views individuals with lower social status and limited human capital as individuals who risk less when they engage in militant political activism and stand to gain the most from a shift in the status quo (Bueno De Mesquita 2005; Lee 2011). On the other hand, individuals from high socio-economic echelons have more to lose by engaging in costly political activism.
This rationale corresponds with two additional bodies of literature. The first are studies arguing that individuals with limited competing commitments (high biographical availability) are more likely to engage in militant activism because potential losses are offset by weaker affiliation to competing frameworks including family, friends, profession, etc. (Wiltfang and McAdam 1991; Martinez and McMullin 2004; Schussman and Soule 2005) . The second body of literature focuses on the concept of relative deprivation and, by using notions from the field of collective psychology, argue that an expression of frustrations resulting from the gap between reality and expectations (Gurr 1970; Moghaddam 2005) leads individuals to join extreme political groups.
Threats to food security represents an extreme scenario that should facilitate the dynamics described above. A lack of food security is likely to create massive grievances in a short period of time due to food’s highly inelastic demand and its relative budget share, which can quickly escalate into a life-threatening issue for individuals living in poverty when prices rise. More generally, food price increases exacerbate poverty gaps, particularly in urban areas (Ivanic and Martin 2008), and conditions of government inability to respond to food shortages can also lead to food insecurity grievances (Walton and Seldon 1994).5,6 This trend was particularly evident in 2007–2008 as record-high food prices were cited as the trigger for protests in 48 countries (Brinkman and Hendrix 2011). Thus, these grievances and lack of government capacity reduce the opportunity costs of engaging in violent political activities, and also reduce the potential limiting factors of competing commitments (immigration as a result of lacking food security almost immediately cuts off individuals from previous commitments to past social frameworks).
Moreover, it should also be noted that the impacts of the initial grievance created by food insecurity are often compounded by secondary effects on government capacity and migration to urban areas. These two secondary effects feed on each other and cannot be discussed in isolation. For example, in a widespread drought, the government of an agrarian society receives significantly less tax revenue but its citizens require more government assistance. The counter-cyclical nature of needs vs. revenue in a country with limited borrowing capacity could thus increase citizens’ grievances with their local and national governments (Chassang and Padro-i-Miquel 2009; Dube and Vargas 2013).7 As a drought worsens, many farmers, desperate for any form of employment and income, will migrate to urban areas. Such migrations and the rapid urbanization associated with them are consistently identified as contributors to increased violence (Barrios, Bertinelli, and Strobl 2006). Grievance, then, provides a step in the right direction for understanding individual decisions to engage in conflict because it translates the effects of macro variables such as food price into an individual decision-making context. However, one being upset at one’s current circumstances is a necessary but insufficient condition to engage in conflict.
The Opportunity Cost of Conflict as a New Paradigm
The synthesis of existing literature and real-world experience points to the need to reformulate our conceptualization of the WCF nexus and internal conflict. Despite the apparent importance of grievance, it is important primarily as a component of the opportunity cost that an individual faces as s/he decides if conflict is a viable course of action. To engage in conflict, a potential combatant must have an alternative opportunity that improves welfare compared with the status quo (Fearon and Laitin 2003).8
Figure 2 shows our proposed conceptualization that is opportunity cost-centric. Here, we focus on the food security trigger, although that is most certainly not the only trigger mechanism for conflict. In the poor, agrarian countries of focus, food security relates to economic well-being, influences migration, and directly impacts government capacity. These three general pathways all interact through reinforcing or countervailing forces, and, indeed, act on each other. Further, all three of these pathways affect an individual’s opportunity cost of engaging in conflict both separately and collectively. Herein lies the key difference between our model and existing models relating WCF and conflict. The focus is on the direct impacts of an external shock on an individual’s decisions, but of equal or greater importance is the amplification or suppression of those impacts through the interaction of the key opportunity cost variables before the individual is ever exposed to the choice in the first place.
To illustrate, if individuals like those in the slums of Aleppo are unemployed, poor, sick, uneducated, and hungry, what is the cost for them to join the resistance? At the same time, food insecurity strains a government’s coffers by robbing the government of tax revenue as requests for social provision increase. Accordingly, properly funding police and military forces becomes exceedingly difficult, especially when the shock is extended and/or the government is always fragile. Regardless of their source, shocks to agricultural production appear to induce this simultaneous increase of grievance and decrease in the opportunity cost of conflict. Where they exist, the incentive to resort to violence appears to increase (Miguel, Satyanath, and Sergenti 2004). However, even the most hungry, desperate peasant may not rise up because the same regime that is exacerbating the widespread famine may also be willing to massacre protesters (Goodwin 2001).9
Some may argue that our formulation seems redundant, or is nothing really new because after all, the statistical relationship between food prices and conflict implies the opportunity cost calculation we are presenting. We would agree that the literature provides great insight on the macro relationships but it offers little insight into why individuals choose to engage in conflict and therefore, offers little hope for addressing the problem in a way that will have lasting results or be resilient to the multitude of variations in real-world conditions. We might loosely think of this in the structural/reduced form dichotomy in modeling. The reduced form model (food price/conflict models, for example) is simpler to identify, but does not provide information about the changes in the underlying structure and/or is unable to identify feedback loops because of their assumption of quasi-random shocks in exogenous variables. Structural models (the opportunity cost approach here) capture these relationships more directly, but are often more difficult to fully identify and require assumptions about theoretical structural relationships in order to recover behavioral parameters. A few examples of intervening effects on traditional pathways will help illustrate this complexity.
Intervening Factors in Pathways
While food production/availability is a necessary condition for food security, it is not sufficient. The ability to acquire food for the household and the ability of food to be moved effectively from production sources to demand points are both part of the food security equation. The gap between demand and effective demand can be made up by imports, own production, or food aid, though food aid is highly subject to logistics issues and government corruption. Heavy reliance on one’s own production, however, does create vulnerability to weather, pest, and other natural processes. Further, imports are subject to government borrowing capacity and/or foreign currency reserves. But if that gap is not filled (or is at risk of not being filled), relative depravation becomes an issue that lowers the opportunity cost of conflict.
Effective demand is significantly related to general economic growth, and thus economic well-being. However, even in countries with robust economic growth, a skewed income distribution can leave large swaths of the population with insufficient income to purchase sufficient food supplies to be food secure. Both economic growth and income distribution are directly related to government policy, and as such, are related to the structure of the government and government legitimacy. For example, countries that support private property rights generally incentivize landowners to invest in agricultural production (Norton, Alwang, and Masters 2010). Countries with significant private property rights also generally enjoy greater economic growth and more equal income distribution, thus promoting effective food demand (O’Driscoll and Hoskins 2003; Powell 2003). Thus, government capacity/legitimacy directly affect food system performance/food security, but is also affected by food security. The bi-directional causality (in fact, a web of multi-dimensional causalities) makes econometric prediction difficult at best. Huffaker (2015) makes the more general point that our traditional econometric methods are lacking when attempting to identify these more complex interrelationships.
In addition to food production and effective demand, food distribution is also a key element in food security. Again, food distribution is related to overall economic growth as well as government policy and legitimacy. Infrastructure investments, the provision of a business environment favorable to investments in processing and transportation, and policies fostering food safety, production, and processing all assist with the translation of food availability into overall food security. For countries that are currently in conflict, the government’s ability to provide security for food production and processing contribute to food insecurity as well as create a potential feedback loop that exacerbates conflict intensity and duration.
The presence of natural resources or other sources of income that can be used to import food can also alter the standard linear causal relation between food and conflict. For example, oil-rich Middle Eastern countries are often water scarce and face significant constraints on food production. However, with ample exportable oil, these countries can easily import sufficient food supplies to meet their needs under normal conditions (when they are not already in conflict or the subject of sanctions). The concept of “virtual water” allows at least some water-scarce countries to import water via to circumvent the water scarcity issue (Allan 1997; Wichelns 2001). Whether these countries utilize the alternative natural resources in this way to enhance food security is not guaranteed, however; if they do not, it could contribute to social instability.
Not surprisingly, then, food insecurity is highly correlated with weak institutions and fragile local economies. Land tenure laws and labor-displacing technologies can negatively affect overall economic growth. Without established property rights (or at least effective social coordination), there are no incentives for farmers to adopt new technologies, manage natural resources, and make land-based investments. Do these inefficiencies lead to environmental degradation and unsustainable agricultural practices, thereby creating more poverty and famine? The answers to these questions directly inform our opportunity cost perspective. Property rights that are structured properly benefit food security because they provide access to international markets and technologies. However, some countries are still constrained by a dependency on labor, which inhibits the adoption of labor-displacing technologies. In other words, can the non-agricultural economy absorb excess labor either in the course of traditional development or as a result of acute shocks? Again, the answer to these questions affects the opportunity cost calculation of individuals.
The Implications for Research
The opportunity cost framework can provide a much richer explanatory model linking events like shocks in the WCF nexus to conflict. However, a shift in conceptualization means a shift in applied research as well. Below, we outline the implications of our framework for research planning and implementation.
Complex Adaptive Systems and Institutions
Because context matters, a discussion of opportunity costs in conflict indirectly brings us back to the broader question of the causal link between hunger and conflict. Hunger and conflict do not happen in a vacuum—they are societal outcomes that must be understood in their broader political, economic, and social contexts (Tilly 1978). For the past twenty or more years, the majority of the conflicts around the world have taken place in poor countries—countries that are also chronically food insecure.
Hunger and conflict appear to be symptoms of deeper problems associated with broken institutions and a dysfunctional political system (Collier et al. 2003; Blattman and Miguel 2010). Does the relationship between food and human insecurity reflect a condition of amplifying existing failure? For example, the drought in the Tuareg region of Mali created significant hardship, but it was the government's reported theft of donated food aid that drove many to take up arms (Benjaminsen 2008). The more fragile the society, the more likely food insecurity is to lead to violence (Bora et al. 2010) because food insecurity and fragile societies ultimately decrease the opportunity cost of conflict. Strong grievances and few alternatives potentially drove hundreds of thousands of people to the streets in the MENA region in 2011and eventually to take up arms against their governments.
Our figure 2 depicts a complex system of multiple sources of changing conditions, feedback, and compound/countervailing factors. People adapt and evolve as conditions change. But, while systems are complex, they need not be complicated (Holland 1992). That is, complex systems have a nearly unlimited supply of stimuli, but follow fairly simple decision rules. In our case, people face an almost infinite set of conditions but condense decisions down into a simple opportunity cost calculation. It is the almost infinite set of conditions that make the effective prediction of conflict difficult at best, and most likely fruitless. Further, focusing on simple linear causality and prediction can often lead to erroneous policy prescriptions because they fail to recognize the interconnectedness of causal factors. Rather, focusing on research that creates adaptive systems is likely more productive.
Borrowing Taleb’s terminology, the outcome of this opportunity cost calculation reflects fragile, robust, or anti-fragile states. In an anti-fragile world, the stressors created by actions inside the three pathways lead to new opportunities where individuals can thrive, thereby leading to a choice of some other, more positive alternative action. But, more likely, the state is either robust or fragile. In a robust (or resilient) state, for example, government security or social services are just enough to offset the costs imposed by a reduction in economic well-being or migration resulting in a status quo choice by individuals. But in a fragile state, the opportunity cost of conflict is less than the perceived marginal benefits because the system cannot adapt and absorb shocks, and conflict ensues (Taleb 2014).
While the existing literature that directly links food prices to conflict, or poverty to conflict, provides insights on the statistical association, they are less informative about how to alter the potential risk of conflict. For example, knowledge of the impact of government social services on relative depravation would help inform policy-makers of the cost/benefit ratio of government services versus the probability of conflict. Thus, understanding the relationships between the nodes, as opposed to between food security and conflict directly, should be our focus of research.
This opportunity cost focus opens up obvious avenues for research in behavior and/or game theoretic fields. A few obvious examples: Do information cascades (especially through social media) change the opportunity cost calculations, and, therefore, increase the probability of migration and/or conflict? How do people perceive the relative risk of conflict versus the outcome of stasis? What is their level of risk/loss aversion in this context? How do risk preferences or calculations change when under the stress of food shortages, migration, or economic hardship? What are the roles/impacts of information asymmetries in their opportunity cost calculations? What are their perceptions of the relative power/commitment of the potential combatants (or more simply, how do they “pick sides” in a potential conflict)? The existing research base can be useful in placing values on choices in a game theoretic explanation or providing parameters and hypotheses for behavioral research, but clearly many of the questions require a new empirical vein of research for effective answers.
Food Security and Conflict in Practice
Turning our attention to the needs of practitioners and policy-makers, the original question is whether shocks in the WCF nexus lead to conflict? The answer is no, per se. That is, climate change, for example, is just one of many potential beginning points in causal chains that can lead to breakdowns in fragile systems and result in conflict. Climate change is neither necessary nor sufficient. But is climate change as postulated by the Inter-governmental Panel on Climate Change (2007) an impact multiplier? That is, climate change may exacerbate the existing biological uncertainty of food production and may amplify the effects of failed/fragile governmental institutions in handling natural disasters and population migration. As such, consideration of climate change (and the WCF nexus, in general) as a stressor or precursor is relevant. But practitioners and policy-makers would be better served by focusing on the opportunity cost of individuals as the best course of addressing system fragility and devising policies to avoid conflict.
From a preliminary prescriptive perspective, if food insecurity contributes to and amplifies conflict as the literature suggests, actors in this space must create policies that mitigate risk by attacking the pathways that lead from food to fighting. More broadly, actors need policies or approaches that minimize grievance and increase the opportunity costs of conflict, particularly in our three primary pathways: economic well-being, migration, and government capacity. In each of these areas, food security is a starting point. An effective food security policy for conflict probability minimization acts to control measures that influence long-term food security and also works to reduce the short-term destabilizing effects of market shocks that can have long-term effects. In this way, effective policies are anticipatory and can absorb market shocks by building in excess government capacity. In the process, the policies increase economic well-being, improve governmental capacity, and reduce the likelihood for migration.
Recognizing that no policy can create 100% food security, governments should allocate their resources where they have the highest marginal benefit; that is most often in the area of food price stability (FAO 2011).10 Price controls have proven effective at improving food price stability in the short-run (Poulton et al. 2006), but not without a cost. Government subsidies that support price ceilings heavily strain already stressed government coffers. Consequently, to be sustained for a prolonged period of time, price controls require a significant amount of excess capacity within the government’s budget. More importantly, price controls limit (or prevent) market adjustments that align the added incentives for production from higher prices, thereby preventing local production from increasing to meet demand (assuming government policy even allows that adjustment in the first place). This outcome of price controls, perhaps with some irony, actually negatively impacts the economic well-being pathway in agrarian societies and can lead to a greater probability of conflict and illustrates why piecemeal approaches, both scientifically and in policy, can lead to erroneous predictions and unintended consequences.
Turning to opportunity cost, it is critical to either make conflict less desirable or to make a different course of action more attractive. States can make conflict less desirable by increasing their police presence and/or toughening punishments for criminal offenders. Doing either of these increases the potential cost of fighting, and thus increases the likelihood of stasis. On the other hand, states can also increase the attractiveness of alternatives beyond revolution and stasis so that a solution other than conflict becomes the highest-valued alternative. By targeting those suffering the most, social safety nets can be particularly effective at reducing the contributors to conflict (Post and Peterson 2016).
To most effectively reduce the risks of conflict for a food security perspective, policies must adequately and simultaneously address each of the four dimensions of food security—availability, stability, utilization, and access (FAO 2009). Ultimately, food availability is the dimension of chief long-run importance since proper food utilization, access, and stability would be fruitless without the sufficient availability of food. Immediate improvements to food security can be achieved by combating underutilization and increasing the nutritional value of citizens’ diets, which has been shown to improve public health and reduce poverty (Pena and Bacallao 2002). For the short run, a policy that ensures the stability of food supplies when unpredictable forces (such as droughts and natural disasters) disrupt the normal supply and helps hold prices to an “acceptable” range can greatly ease the burdens on society and government legitimacy. However, this excess capacity comes at a cost. We know that price stabilization programs generate deadweight loss (Miranda and Helmberger 1988), but our question should be what does that deadweight loss buy? More specifically, what are the costs of action versus inaction?
This journey through a very broad body of literature has led to a condensation of very different econometric and theoretical constructs to a simplified opportunity cost view of conflict. We contend that how external shocks like food price spikes filter through the pathways of migration, economic well-being, and government legitimacy is what leads individuals to decide whether or not to engage in conflict, rather than the food prices themselves.
Our formulation does not nullify the previous literature. Rather, it should cause us to rethink what that literature implies and alter how we move forward with future research. But our approach does imply that attempts to “predict” conflict from reduced form models is largely fruitless because of the infinite variations in potential external shocks. Focusing on developing methods for assessing opportunity cost will help inform the creation of institutions that are more robust to those external shocks. In this respect, applied economists have much to contribute.