Presenter: Anand Shrivastava
Paper: Shrivastava, Civil conflict with rising wages and increasing state capacity
Abstract: This paper presents a model demonstrating the mechanisms through which rising wages and increasing state capacity could lead to conflict. Conflict is modeled as a game between the state, the local population and ideologically motivated rebels for the control of a natural resource that is valued by both the state and the local population. The analysis shows that at low wage levels, an increase in wage could lead to conflict, and that the effect of state capacity on conflict is non-monotonic. 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 an employment guarantee programme 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.