"Abstract The dominant hypothesis in the literature that studies conflict is that poverty is the main cause of civil wars. We instead analyze the effect of institutions on civil war, controlling for income per capita. In our set up, institutions are endogenous and colonial origins affect civil wars through their legacy on institutions. Our results indicate that institutions, proxied by the protection of property rights, rule of law and the efficiency of the legal system, are a fundamental cause of civil war. In particular, an improvement in institutions from the median value in the sample to the 75th percentile is associated with a 38 percentage points’ reduction in the incidence of civil wars. Moreover, once institutions are included as explaining civil wars, income does not have any effect on civil war, either directly or indirectly."
The implications of this are huge and it looks like the researchers have been pretty careful about putting the right controls in place. The case that a robust defence of property rights, and other liberal economic institutions, should be a priority for developing countries has always been strong thanks to the clear connection to economic growth. However, now we have good reason to think that such institutions aren't just the best route to greater prosperity but also independently prevent the tragedy of civil war.
If we want to help foreign countries encouraging the development of institutions and the defence of property rights is the way to go. Development aid and other international interventions won't encourage peace and stability if they don't come with pressure to put the right institutions in place. This report provides a powerful case for conditionality.
Given the greater effectiveness, in encouraging stability, of institutions inherited from the British Common Law tradition, a factor mentioned explicitly in the full text linked above, this report's findings even strengthen Niall Ferguson's case for the British Empire in Empire.