Temporary trade shocks and regional development: evidence from the closure of Abidjan port

Abstract

Can temporary trade restrictions reshape regional development? To analyze this, we exploit the Cote d'Ivoire civil war that disrupted access to Abidjan port for neighboring land-locked countries: Mali and Burkina Faso. Estimates from a difference-in-difference design suggest negative effects on economic activity and a reverse structural change in the treatment communes. We find evidence of persistence through irreversible investment in built-up areas and divergence in the growth of nightlights. Treatment communes at the intermediate distance from the nearest city experienced stronger adverse impacts, driven partly by a relocation to the communes close to other ports.