Conflict is normally disruptive for efficient delivery of public services such as health and education and therefore has a long term consequences on human capital formation. We investigate whether the disruptive hypotheses holds true in the particular conflict setting of Nepal.

Nepal experienced ten years of civil conflict (1996 to 2006) between the State and the Maoist forces. Anecdotes are available about the effects of the civil conflict on health service delivery in Nepal: some argue that the conflict disrupted the smooth flow of health service delivery while others claim that the health was the least affected of all sectors. The claimants of the latter group reason that the perception of the Maoist towards public service delivery was reportedly positive. There is also evidence that the Maoist promote cultural practices that were progressive in nature; an urge to such practices may also have changed people’s behavior affecting health status and health care utilization.   Hence, a true effect of conflict on basic service such as health is not clear a priori in case of Nepal.

We analyze the effects of the armed conflict in Nepal on individual health status and the institutional health care utilization. We use three waves of nationally representative household surveys (Nepal Living Standards Survey) that uniquely covers various stages of conflict viz., no-conflict, conflict and post-conflict period and the detailed conflict data from Informal Service Center Nepal. We further exploit district level variation in the conflict intensity to evaluate short term and medium term impacts of conflict (that corresponds to the latter two stages of conflict).

Following difference-in-difference approach to estimation, we find that conflict is associated with short-term improvement in individual health status and both short-term and medium-term increase in health care utilization. One standard deviation increase in conflict-related causalities is associated with about 4 and 10 percentage point improvement respectively in health status and utilization.

Lastly, we provide supportive evidence for the possible mechanisms of conflict-health association. We find that the improvement in the quality of health services particularly by way of Maoist’s policing of staff’s absenteeism in health facilities have led to better health outcomes in conflict intense areas. Another possible pathway may be that the drive towards policing cultural norms by Maoists may have induced rural people to seek for modern health care which is still not customary in large part of rural Nepal.