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NICEP 2023-07: Can competition reduce conflict?

 

Abstract

We examine the effect of inter-group fiscal competition on within-group violent conflict. Using a triple difference design, we exploit exogenous variation in the degree to which villages in sub-districts compete for public funds. We find that higher competition between villages reduces conflict but only up to moderate levels of competition. The conflict-reducing effects of competition are largest in the most ethnically fractionalized and segregated villages and exist regardless of the eventual outcome of the competition. Our results are consistent with external competition favoring coordination within otherwise divided communities and boosting village identity relative to ethnic identity.

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Authors

Teevrat Garg, Caterina Gennaioli, Stefania Lovo and Gregor Singer

 

 

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Posted on Thursday 20th July 2023

Nottingham Interdisciplinary Centre for Economic and Political Research

University of Nottingham
Law and Social Sciences Building
University Park
Nottingham, NG7 2RD


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