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Conflict, Ideology and Foreign Aid

Author

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  • Julien LABONNE
  • Adama BAH

    (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • Jean-Louis ARCAND

Abstract

In this paper, we present a rent-seeking model of conflict, which highlights the role of ideology in determining whether the government or the rebels take the initiative. We use the model to interpret the impact of a large-scale Community-Driven Development project on civil conflict in the Philippines. The country is characterized by the presence of two rebel groups, the New People's Army (NPA) and the Moro Islamic Liberation Front (MILF), with two distinct ideologies. We use a unique geo-referenced panel dataset on the occurrence of conflicts in 2003 and 2006 gathered from local newspapers that we match with nationally representative household survey and budget data on all municipalities in the country. Consistent with our model's predictions, using a variety of estimation strategies, we find robust evidence that the project leads to a decline in MILF-related events and to an increase in NPA-related events.

Suggested Citation

  • Julien LABONNE & Adama BAH & Jean-Louis ARCAND, 2010. "Conflict, Ideology and Foreign Aid," Working Papers 201021, CERDI.
  • Handle: RePEc:cdi:wpaper:1184
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    References listed on IDEAS

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    1. Jean-Paul Azam, 2001. "The Redistributive State and Conflicts in Africa," Journal of Peace Research, Peace Research Institute Oslo, vol. 38(4), pages 429-444, July.
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    3. Labonne, Julien & Chase, Robert S., 2011. "Do community-driven development projects enhance social capital? Evidence from the Philippines," Journal of Development Economics, Elsevier, vol. 96(2), pages 348-358, November.
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    8. de Ree, Joppe & Nillesen, Eleonora, 2009. "Aiding violence or peace? The impact of foreign aid on the risk of civil conflict in sub-Saharan Africa," Journal of Development Economics, Elsevier, vol. 88(2), pages 301-313, March.
    9. Azam, Jean-Paul & Mesnard, Alice, 2003. "Civil War and the Social Contract," Public Choice, Springer, vol. 115(3-4), pages 455-475, June.
    10. Paul Collier & Anke Hoeffler, 2007. "Unintended Consequences: Does Aid Promote Arms Races?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(1), pages 1-27, February.
    11. Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-921, September.
    12. Barron, Patrick & Diprose, Rachael & Woolcock, Michael, 2007. "Local conflict and development projects in Indonesia : part of the problem or part of a solution ?," Policy Research Working Paper Series 4212, The World Bank.
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    Cited by:

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    2. Stijn van Weezel, 2017. "Mostly Harmless? A Subnational Analysis of the Aid-Conflict Nexus," Working Papers 201728, School of Economics, University College Dublin.

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    More about this item

    Keywords

    Civil Conflict; Foreign aid; Rent Seeking; Community-Driven Development; Philippines;
    All these keywords.

    JEL classification:

    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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