Can Competition Reduce Conflict?

Arbeitspapier

We examine the effect of inter-group fiscal competition on within-group violent conflict. Using a triple difference design, we exploit exogenous variation in the degree to which villages in sub-districts compete for public funds. We find that higher competition between villages reduces conflict but only up to moderate levels of competition. The conflict-reducing effects of competition are largest in the most ethnically fractionalized and segregated villages and exist regardless of the eventual outcome of the competition. Our results are consistent with external competition favoring coordination within otherwise divided communities and boosting village identity relative to ethnic identity.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 10568

Classification and Topics

• Classification: Wirtschaft ; Conflict; Conflict Resolution; Alliances; Revolutions ; Microeconomic Analyses of Economic Development ; Publicly Provided Goods: General
• Subject: community-driven development ; competition ; conflict

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Garg, Teevrat ; Gennaioli, Caterina ; Lovo, Stefania ; Singer, Gregor
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/279319
• Last update: 10.03.2025, 11:44 AM CET