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Extortion with Protection

Author

Listed:
  • Rachel Sabates-Wheeler

    (Centre for Social Protection, Institute of Development Studies, University of Sussex, Falmer, UK)

  • Philip Verwimp

    (ECARES and Centre Emile Bernheim, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels, Belgium)

Abstract

Using a panel data set from Burundi where information on protection payments during the twelve-year civil war was collected, we test the relationship between payments, the nature of extraction by the rebels, and the welfare outcomes. We ask, “Does payment to rebels insure against future welfare loss and does the nature of payment matter? Specifically, does the level of institutionalization of extraction within the rebel governance structure provide a form of insurance for future welfare?†No less than 30 percent of the interviewees made at least one payment. Rebels extract these taxes through one of the following two routes: an “institutionalized†and regular cash-with-receipt method or an ad hoc and unpredictable labor extraction. Using matching methods, we find that payment through the institutionalized route increases household welfare between 16 and 25 percent. Ad hoc extraction has no effect. We situate our findings in the empirical literatures on contributions to mafia-type organizations and rebel governance.

Suggested Citation

  • Rachel Sabates-Wheeler & Philip Verwimp, 2014. "Extortion with Protection," Journal of Conflict Resolution, Peace Science Society (International), vol. 58(8), pages 1474-1499, December.
    • Handle: RePEc:sae:jocore:v:58:y:2014:i:8:p:1474-1499
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    Citations

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    Cited by:

    1. Travers Barclay Child, 2020. "Losing Hearts & Minds: Aid and Ideology," HiCN Working Papers 328, Households in Conflict Network.
    2. Lionel Jeusette & Philip Verwimp, 2017. "Childhood aspirations, occupational outcomes and exposure to violence: Evidence from Burundi," HiCN Working Papers 247, Households in Conflict Network.
    3. Neu, Dean, 2019. "Accounting for extortion," Accounting, Organizations and Society, Elsevier, vol. 76(C), pages 50-63.

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