Cohesive Institutions and Political Violence

Can institutionalized transfers of resource rents be a source of civil conflict?Are cohesive institutions better in managing distributive conflicts? We studythese questions exploiting exogenous variation in revenue disbursements tolocal governments together with new data on local democratic institutions inNigeria. We make three contributions. First, we document the existence of astrong link between rents and conflict far away from the location of the actualresource. Second, we show that distributive conflict is highly organized involvingpolitical militias and concentrated in the extent to which local governmentsare non-cohesive. Third, we show that democratic practice in form havingelected local governments significantly weakens the causal link between rentsand political violence. We document that elections (vis-a-vis appointments), byproducing more cohesive institutions, vastly limit the extent to which distributionalconflict between groups breaks out following shocks to the availablerents. Throughout, we confirm these findings using individual level surveydata.