ECONOMIC CONDITIONS, POLITICAL INSTITUTIONS AND CONFLICT. Lakshmi Iyer

ECONOMIC CONDITIONS, POLITICAL INSTITUTIONS AND CONFLICT Lakshmi Iyer (Harvard Business School) Impact and Policy Conference 2012

CONFLICT: MANY TYPES Inter-state aka war Intra-state/internal Civil war Terrorism People-to-people Organized crime Targeting specific sections of society Women Religious minorities

INTERNAL CONFLICT IS BECOMING MORE COMMON THAN INTER-STATE CONFLICT 60 50 40 30 20 10 0 Countries with external conflict Countries with internal conflict Source: Author s calculations from UCDP/PRIO Armed Conflict Dataset Version 4-2012 Conflict is defined as A contested incompatibility that concerns government and/or territory where the use of armed force between two parties, of which at least one is the government of a state, results in at least 25 battle-related deaths.

LOW-LEVEL CONFLICTS ARE BECOMING MORE WIDESPREAD 45 40 35 30 25 20 15 10 5 0 Conflicts with 25-999 deaths Conflicts with at least 1000 deaths Source: Author s calculations from UCDP/PRIO Armed Conflict Dataset Version 4-2012

-8-6 -4-2 0 2 ECONOMIC ROOTS: POOR COUNTRIES EXPERIENCE MORE INTERNAL CONFLICT Nepal Sri Lanka India Pakistan Bangladesh 6 7 8 9 10 11 Log GDP per capita 1998 (PPP) Source: Iyer (2011). Conflict data is from Global Terrorism Database 2. GDP and population data from World Development Indicators.

0 2 4 6 POOR REGIONS WITHIN COUNTRIES EXPERIENCE MORE CONFLICT: NEPAL Conflict deaths in Nepal s civil war 1996-2006 Rukum Rolpa Kalikot Jumla Myagdi Dang Achham Jajarkot Salyan Lamjung Arghakhanchi Solukhumbu Surkhet Bajura Dadeldhura Banke Mugu Dailekh Dolakha Kailali Bhojpur Gorkha Bardiya Humla Doti Ramechhap Taplejung Sankhuwasabha Ilam Nuwakot Okhaldhunga Sindhuli Terhathum Dhading Kavrepalanchok Kanchanpur Sindhupalchok Panchthar Chitawan Parbat Bajhang Khotang Udayapur Baglung Darchula Kaski Bara Dhanusa Nawalparasi Makwanpur Dhankuta Kapilbastu Palpa SyangjaTanahu Rautahat Baitadi Kathmandu Lalitpur Pyuthan Sarlahi Siraha Jhapa Bhaktapur Mahottari Gulmi Rupandehi Morang ParsaSunsari Saptari Manang 0.2.4.6.8 1 Poverty rate 1995-96 Conflict deaths per 1000 population Fitted values Source: Do and Iyer (2010). Notes: Conflict data collected at district level by the Informal Sector Service Center, Kathmandu. Poverty rate from Nepal Living Standards Survey, 1995-96.

POVERTY AND CONFLICT ACROSS INDIAN DISTRICTS 2500 2000 1500 1000 500 0 Poverty<20% 20%<Poverty <=40% Poverty>40% # conflict deaths per 1000 population 1998-2007 Source: Iyer (2011). Notes: Conflict data is from the RAND-MIPT Terrorism Incident Database (1998-2007). Conflict is defined as Violence calculated to create an atmosphere of fear and alarm to coerce others into actions they would not otherwise undertake, or refrain from actions they desired to take. Acts of terrorism are generally directed against civilian targets. District level poverty rates are Head Count Ratios (percentage of population below the state-specified poverty line) computed from National Sample Surveys 1999-2000.

POLITICAL EMPOWERMENT OF TARGETED GROUPS Mandated political representation of women increasingly common India s Panchayati Raj: 1/3 rd of all local (district/village) councils to consist of women 50% in Afghanistan village development councils (Fotini et al, 2012) Many other developed and developing countries have gender quotas for elected officials. Panchayati Raj elections in India held at different dates by different states. Can assess the effect by comparing states before and after women gain such representation.

EFFECTS OF FEMALE POLITICAL REPRESENTATION IN INDIA 35% 30% % Change after Panchayati Raj Implementation CRIMES AGAINST WOMEN OTHER CRIMES ARRESTS FOR CRIMES AGAINST WOMEN 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% Source: Iyer et al (2012). Crime data obtained from National Crime Records Bureau, New Delhi. Crime variables are number of crimes per 1000 population (gender-specific population for gender-specific crimes). Results control for demographic characteristics, real per capita state GDP, policy strength per capita, state and year fixed effects and state-specific time trends.

WHAT ABOUT POLITICAL REPRESENTATION OF RELIGIOUS MINORITIES? Evidence from two newly created databases Religious identity of state level legislators (based on names) Incidents of Hindu-Muslim violence based on news reports in the Times of India (extend the Varshney-Wilkinson database from 1995 to 2010). Episodes of religious violence are not rare in India: Hindu-Muslim riots occurred in every year over the period 1980-2007, and in all but two states. On average, 7-8% of state legislators; this is below the Muslim population share of 13%. There is a decline in the occurrence of Hindu-Muslim riots after 1992 (except for the events of 2002 in Gujarat).

MUSLIM LEGISLATORS AND HINDU- MUSLIM VIOLENCE What is the impact of having a Muslim MLA on the probability of occurrence of a Hindu-Muslim riot? Confounding factors: places which elect Muslim MLAs might be very different from places which do not. We will therefore compare places where Muslim candidates narrowly won elections to places where Muslim candidates narrowly lost, as a means of controlling for such unobservable differences across different areas.

MUSLIM LEGISLATORS AND HINDU-MUSLIM VIOLENCE (PRELIMINARY EVIDENCE) Sample All districts Districts with close elections between Muslims and non-muslims Vote margin to define close elections 5% 3% 2% Average probability of riot in sample 5.8% 9.5% 9.5% 8.4% Effect of having a Muslim MLA in the district 0.3% -1.0% -4.5% -6.0% Source: Bhalotra, Clots-Figueras and Iyer, 2012. Effect of having a Muslim MLA is computed from regressions which control for year and district fixed effects.

POLICY CONCLUSIONS Internal conflict/civil war has strong economic roots. Political representation can be an effective means to protect targeted communities. Rebuilding economic growth and political institutions are likely to be instrumental in preventing further conflict. But these are big challenges in post-conflict environments. Survey data from South Asian countries indicates the following characteristics of job markets in conflict zones: Preponderance of agricultural jobs and a lack of manufacturing and construction jobs. Education and skill deficits among the workforce. Greater labor force participation, but a large incidence of unpaid and casual jobs. Source: Iyer and Santos (2012).

PAPERS CITED Bhalotra, Sonia, Irma Clots-Figueras and Lakshmi Iyer (2012), Politician Identity and Religious Violence, Work in Progress. Do, Quy Toan and Lakshmi Iyer (2010), Geography, Poverty and Conflict in Nepal. Journal of Peace Research, 47 (6), 2010. Iyer, Lakshmi (2011), Managing Conflict. In Ejaz Ghani, ed., Reshaping Tomorrow: Is South Asia Ready for the Big Leap?, Oxford University Press. Iyer, Lakshmi, Anandi Mani, Prachi Mishra and Petia Topalova (2012), The Power of Political Voice: Women's Political Representation and Crime in India." American Economic Journal: Applied Economics (forthcoming). Iyer, Lakshmi and Indhira Santos, 2012. Creating Jobs in South Asia s Conflict Zones. World Bank Policy Research Working Paper WPS 6104.

RECONSTRUCTING INSTITUTIONS AFTER VIOLENT CONFLICT F O T I N I C H R I S T I A, M I T Bangkok 2012

MOTIVATION Presumed causal link between institutional quality and development. Post-conflict areas replete with new institutional designs. Context renders assessment highly cumbersome. As a result, lack of consistent rigorous empirical evidence on institutional effect on governance, broader stability and economic well being.

VARIATION IN INSTITUTIONAL QUESTIONS OF INTEREST Afghanistan (with Andrew Beath (WB) and Ruben Enikolopov (NES)) Counterinsurgency Context Institution under Evaluation: CDD Program Bosnia-Herzegovina (with Marc Alexander (Stanford) Ethnic Reintegration Context Institution under Evaluation: First Integrated School

OPERATIONALIZATION Country Units Partners Funding Years $ Afghanistan Bosnia and Herzegovina 500 villages; ~15,000 respondents 3 schools; 244 students MRRD; WB; 7 local & intl. NGOs Mostar Municipality; OSCE MRRD; WB; USAID; UNWFP; CIDA; IGC Russel Sage; Harvard Univ. 5 2 M 1 15K

AFGHANISTAN: CDD PROGRAM The National Solidarity Program (NSP) is Afghanistan s largest development Program. Present in over 29,000 of Afghanistan s 38,000 villages. Sponsored by international donors and run by MRRD. Implemented by NGOs in two main stages: Election of Community Development Councils (CDCs) through secret-ballot election. Project Selection.

The evaluation estimates impacts by collecting data over four years in 500 villages: 250 NSP (treatment) & 250 non-nsp (control) Structure of Evaluation and Data Collection Aug. Sep. 2007 May Oct. 2009 May-Nov. 2011 Treatment Villages (NSP) Control Villages (Non-NSP) Baseline Survey Create CDCs Select Projects Implement Projects 1 st Follow- Up Survey Projects Finished 2 nd Follow- Up Survey followed by Wheat Distribution Similarity of Treatment and Control Villages Interim Estimates Final Estimates

SUBTREATMENT INTERVENTIONS Comparing two ways of electing councils Single Member Districts Multi-member Districts Comparing two ways of selecting projects Referendum Community Consultation Meeting

QUESTIONS FOR CDD EVALUATION Random assignment allowed us to examine range of impact-related questions: Both substantive: Can development aid reduce insecurity? Can development aid improve women s lives? And operational: Do electoral rules affect who gets elected? Does method of project selection affect capture of resources?

NSP S INTERIM IMPACTS NSP reduces insecurity by winning hearts and minds. NSP improves women s economic and social status in the community. Higher quality council members if elected in multimember districts. Lower levels of elite capture if projects selected via referenda.

NSP BEHAVIORAL INTERVENTION Additional behavioral intervention to triangulate attitudinal results. Instead of behavioral games, we measured behaviors through real life event in rural Afghanistan. Compared outcomes in targeting and corruption during a food aid distribution, in villages with customary governance structures versus villages with democratically elected councils.

NSP BEHAVIORAL INTERVENTION FINDINGS Existence of multiple institutional structures can lead to institutional competition and underperformance. When in the lead, better aid targeting and higher participation. When not in the lead, higher levels of embezzlement and lower levels of participation.

OTHER RANDOMIZED CDD EVALUATIONS CDD increasingly popular: US$1.3 billion per year in lending in 2000-2008 by WB towards ~50 CDD projects. Fearon et al (2009) in Liberia find little impact on economic well being but some on governance. Barron et al (2009) in Indonesia and Casey et al (2011) in Sierra Leone identify some positive effects on economic outcomes but none on sociopolitical measures. Humphreys et al (2012) in DRC find no effect.

BOSNIA: SCHOOL INTEGRATION Does post-conflict institutional integration improve inter-ethnic cooperation? Partial integration of high schools leaving student allocation to segregated or integrated environment to chance. N-person public goods game to assess institutional effect on people s willingness to contribute to a public good.

FINDINGS OF SCHOOL INTEGRATION ON PUBLIC GOODS PROVISION IN BOSNIA On average, integrated institutions significantly increase contribution to public goods. Availability of sanctions in integrated institutions drives up contributions significantly but has no such effect in segregated institutions. Diversity of groups leads to lower public goods contribution only in the context of segregated institutions.

OTHER STUDIES RCTs on peer effects, teacher pupil ratios, teacher incentives, teacher performance, report cards, uniforms, textbooks, school meals, primary school deworming, educational incentives for parents and children. But not in conflict contexts. Exception: Burde and Linden (2012)who find that in Afghanistan village-based schools in villages that lack public schools, significantly increase enrollment and test scores and eliminate gender disparity.

ISSUES AND RECOMMENDATIONS

NO ONE-SIZE-FITS-ALL INSTITUTIONAL INTERVENTION Fetishization of new institutional frameworks post conflict, with emphasis on representation. New institutions not necessarily a panacea as indicated by variant results of CDD impact. Focus should be placed on specific contextual needs and interventions that also look to existing institutional frameworks and interactions between old and new.

PARTNERSHIP WITH ACADEMICS Organizations faced with post-conflict challenges often find it too cumbersome to pursue rigorous evaluation for their projects. Opportunities for organizations to link up with academics who can design optimal evaluation relevant to the context taking advantage of existing discontinuities and exogenous variation. Academics can also raise considerable funds, allowing program to afford better assessment than its budget would allow.

BETTER COORDINATION FOR REPLICATION Hard to generalize or even compare findings of studies that look at post-conflict institutions as different: Context Intervention Measures Replication remains very important and requires higher levels of coordination in interventions studied as well as in indicators and measures employed.

MORE SHARING Notable progress in sharing research designs. Posting of pre-analysis plans also important in protecting from data mining and reporting bias. But too many people in the field still facing same logistical and operational problems because not enough discussion on realities of implementation in postconflict context. EGAP, JPAL and other venues should encourage more public sharing on field challenges pertaining to better access, more appropriate enumeration, better human subjects protection.

Reintegrating Combatants into Civilian Life Cyrus Samii, New York University

Rigorous evaluations of reintegration programs Humphreys & Weinstein (2007, Sierra Leone) Annan, Blattman, Carlson & Mazurana (2007, Uganda) Barron, Humphreys, Paler & Weinstein (2009, Aceh) Gilligan, Mvukiyehe & Samii (2012, Burundi) Blattman & Annan (2012, Liberia) Studies involved university, IGO, and NGO partnerships. Study costs varied from tens of thousands to hundreds of thousands.

Typical program concept: first generation inputs economic integration political integration

Typical program concept: critiques context: social economic psychological inputs economic integration political integration

Typical program concept: second generation context: social economic psychological inputs economic integration political integration

Evaluating the program concept context: social economic psychological inputs economic integration political integration

Evaluating the program concept context: social economic psychological inputs economic integration political integration Studies in Burundi, Liberia, and Sierra Leone.

Evaluating the program concept context: social economic psychological inputs economic integration political integration Positive impact with poverty reduction, quality of livelihood (Burundi, Liberia). No downstream effect in Burundi, and Sierra Leone, economic & political outcomes uncorrelated. But in Liberia, some evidence that jobs deters participate in violence.

Evaluating the program concept context: social economic psychological inputs economic integration political integration Studies in Sierra Leone and Uganda.

Evaluating the program concept context: social economic psychological inputs economic integration political integration Abusiveness of faction predicted social acceptance (Sierra Leone), but not economic or political outcomes. Social uncorrelated with economic or political (Sierra Leone). Emphasis on psych. factors seems misplaced (Uganda).

Evaluating the program concept context: social economic psychological inputs economic integration political integration Studies in Aceh and auxiliary evidence from Burundi.

Evaluating the program concept context: social economic psychological inputs economic integration political integration Community perceptions of ex-combatants were actually worsened by CDD programming. In Burundi, coordination of community-based and individual based programming failed (major time gaps).

Evaluating the program concept context: social economic psychological inputs economic integration political integration

Implications For policy: We are pretty good at livelihood enhancement, but it s not clear that how much this contributes to political integration. We need more study of the latter. We have failed to understand or find ways to contribute to producing social contexts more conducive to integration. In building knowledge capacity: Despite the sensitive contexts, rigorous research can be done to study program concepts for combatant reintegration. The results so far indicate that much more study is indeed needed to ensure limited programming resources are applied efficiently.