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Building Peace: The Impact of Aid on the Labor Market for Insurgents


  • Radha Iyengar
  • Jonathan Monten
  • Matthew Hanson


Employment growth could reduce violence during civil conflicts. To determine if increased employment affects violence we analyzed varying employment in development programs run by different US military divisions in Iraqi districts. Employment levels vary with funding periods and the military division in charge. Controlling for variability between districts, we find that a 10% increase in labor-related spending generates a 15-20% decline in labor-intensive insurgent violence. Overall the 10% spending increase is associated with a nearly 10% violence reduction, due to reduction in attacks which kill civilians, but increased attacks against the military. These findings indicate that labor-intensive development programs can reduce violence during insurgencies.

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  • Radha Iyengar & Jonathan Monten & Matthew Hanson, 2011. "Building Peace: The Impact of Aid on the Labor Market for Insurgents," NBER Working Papers 17297, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:17297
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    7. Radha Iyengar & Jonathan Monten, 2008. "Is There an "Emboldenment" Effect? Evidence from the Insurgency in Iraq," NBER Working Papers 13839, National Bureau of Economic Research, Inc.
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    10. Matthew A. Hanson, 2007. "The Economics of Roadside Bombs," Working Papers 68, Department of Economics, College of William and Mary.
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    Cited by:

    1. Marshall Burke & Solomon M. Hsiang & Edward Miguel, 2015. "Climate and Conflict," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 577-617, August.
    2. repec:eee:wdevel:v:98:y:2017:i:c:p:506-522 is not listed on IDEAS
    3. Miaari, Sami & Zussman, Asaf & Zussman, Noam, 2014. "Employment restrictions and political violence in the Israeli–Palestinian conflict," Journal of Economic Behavior & Organization, Elsevier, vol. 101(C), pages 24-44.
    4. Saurabh Singhal & Rahul Nilakantan, 2012. "Naxalite Insurgency and the Economic Benefits of a Unique Robust Security Response," HiCN Working Papers 127, Households in Conflict Network.
    5. Travers Barclay Child, 2017. "We Don’t Need No Education: Reconstruction and Conflict across Afghanistan," HiCN Working Papers 244, Households in Conflict Network.
    6. Willa Friedman, 2013. "Local Economic Conditions and Participation in the Rwandan Genocide," HiCN Working Papers 160, Households in Conflict Network.
    7. Thiemo Fetzer, 2014. "Can Workfare Programs Moderate Violence? Evidence from India," STICERD - Economic Organisation and Public Policy Discussion Papers Series 53, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    8. Benjamin Crost & Joseph H. Felter & Hani Mansour & Daniel I. Rees, 2013. "Election Fraud and Post-Election Conflict: Evidence from the Philippines," HiCN Working Papers 158, Households in Conflict Network.
    9. Eli Berman & Joseph Felter & Ethan Kapstein & Erin Troland, 2012. "Predation, Taxation, Investment, and Violence: Evidence from the Philippines," NBER Working Papers 18375, National Bureau of Economic Research, Inc.
    10. Heidi Kaila & Saurabh Singhal & Divya Tuteja, 2017. "Do fences make good neighbours? Evidence from an insurgency in India," WIDER Working Paper Series 158, World Institute for Development Economic Research (UNU-WIDER).
    11. Beath,Andrew & Christia,Fotini & Enikolopov,Ruben & Beath,Andrew & Christia,Fotini & Enikolopov,Ruben, 2012. "Winning hearts and minds through development ? evidence from a field experiment in Afghanistan," Policy Research Working Paper Series 6129, The World Bank.

    More about this item

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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