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Anand Shrivastava - Research Summary

University of Namur

Civil conflict with rising wages and increasing state capacity

This paper presents a model demonstrating the mechanisms through which rising wages and increasing state capacity could lead to civil conflict over a natural resource. Conflict is modelled as a game between the state, the rebels and the local population. Increasing wages lead to lower risk aversion, which makes the local population more likely to support conflict whose outcome is uncertain. The relationship between conflict and state capacity is non-monotonic because while the rebel's willingness to fight decreases with increasing state capacity, the state's willingness to fight increases with it. The implication regarding wage is tested on district level data on conflict and agricultural wage from six Indian states that are affected by the Maoist insurgency. The implementation of the National Rural Employment Guarantee Act is used as an instrument for wage after removing district specific heterogeneity. The results support the model's implication and are robust to different specifications.

Download the paper here.