Research

Working papers and ongoing work

The Economic Costs of Conflict: a Production Network Approach (with Mathieu Couttenier and Lavinia Piemontese)

[CEPR Discussion Paper No DP16984, Feb. 2022] Submitted.

We focus on the Maoist insurgency in Eastern India during 2000-2009 to develop a novel approach to estimate the economic costs of conflict, where the production network is a first-order mechanism through which the disruptive effect of localized conflict spreads to peaceful districts. We first estimate the local impact of conflict. We then apply a model of production networks to quantify the overall impact of conflict by taking network propagation into account. We find that the Maoist insurgency results in an average aggregate output loss of 3.8 billion USD per year. Interestingly, 73% of the loss is explained by network propagation.

Presented at: ENS de Lyon, ECARES, CEPR RPN Workshop on preventing conflict, Bristol University, CED, UNSW Australia, CREST Paris, Paris Empirical Political Economy Seminar, IIE, University of Geneva, UAB Barcelona, University of Orleans, CERGE-EI Prague, University of Louvain, University of Montreal, University of Paris 1, University of Bologna, ENS-CEPR Workshop on firms in hostile environments, Paris XI, AFSE Summer Congress, SIOE Summer Congress, University of Montpellier, 2021 Conference on Economic Development, IGIER Bocconi Conference on political economy of power relations


Hit them in the Wallet! An Analysis of the Demonetization as a Counter-Insurgency Policy (with Edoardo Chiarotti) [Latest Version + Online Appendix] [IHEID Working Paper]

This paper investigates the causal link between the cash nature of the finances of organized armed groups and their subsequent violent activities. We use the sharp cash shortage that followed the 2016 Indian Banknote Demonetization as a natural experiment. The severity of the shortage in different districts is measured using the spatial distribution of demonetized and newly introduced notes. We construct a unique and rich dataset on daily violent events, fatalities and surrenders of the Maoist insurgents in India between 2006 and 2018. Our results suggest that there is a general reduction in violence after the policy in districts experiencing more severe cash shortage, and a positive impact on surrenders of Maoist extremists. Second, we find that the increase in the trend of surrenders is mitigated where Maoists have higher abilities to raise funds, through three traditional sources of revenue, i.e. the extortion of public work contractors, mineral and forest resources. This paper provides the first study on the importance of cash in illegal activities and an ex-post evaluation of a policy countering illicit cash flows.

Presented at: Bocconi Internal Seminar (Milan), SSES Annual Congress on Sustainable Development (Geneva), 19th Jan Tinbergen Peace Science Conference (The Hague), UQAM Internal Seminar (Montreal), 2021 Spring Metting of Young Economists (Bologna, online)

Domestic Violence and the Labor Market: Evidence from Switzerland [Draft available soon]

Existing theories point to a link between domestic violence and the labor market conditions of partners in a household. This paper revisits the evidence using Switzerland as a unique laboratory, allowing for a detailed dataset on recorded criminal offenses, incomes and demographic characteristics between 2012 and 2015. Results suggest that increase in intimate partner violence is associated with lower individual wages, and when the wage of the perpetrator is decreasing relative to the victim. The latter relation only holds in a male-perpetrated violence scenario - against his female partner, and is stronger when the male perpetrator does not earn any income. Results are in line with the male backlash theory, which posits that the perpetrator uses violence as a retaliation tool to reestablish a dominant position within the relationship. Heterogenous effects arise at low levels of wealth where the bargaining effect dominates: a relative increase in the victim’s economic resources decreases his/her risk of violence in the domestic sphere.


Publication

Shutdown Policies and Worldwide Conflict (with Nicolas Berman, Mathieu Couttenier & Rohit Ticku)

[Latest Version + Online Appendix] [Covid Economics: Vetted and Real-Time Paper - CEPR Press 16, May 2020] Journal of Comparative Economics, Volume 50, Issue 1, March 2022, p. 240-255.

We provide evidence on the link between the policy response to the SARS CoV-2 pandemic and conflicts worldwide. We combine daily information on conflict events and government policy responses to limit the spread of SARS CoV-2 to study how demonstrations and violent events vary following shutdown policies. We use the staggered implementation of restriction policies across countries to identify the dynamic effects in an event study framework. Our results show that imposing a nation-wide shutdown is associated with a reduction in the number of demonstrations, which suggests that public demonstrations are hampered by the rising cost of participation. However, the reduction is short-lived, as the number of demonstrations are back to their pre-restriction levels in two months. In contrast, we observe that the purported increase in mobilization or coordination costs, following the imposition of restrictions, is not followed by a drop of violent events that involve organized armed groups. Instead, we find that the number of events, on average, increases slightly following the implementation of the restriction policies. The rise in violent events is most prominent in poorer countries, with higher levels of polarization, and in authoritarian countries. We discuss the potential channels underlying this heterogeneity.

Presented at: ENS-Lyon Internal Seminar (Lyon), Chapman University Internal Seminar.


Book Chapter

Conflict in Times of Covid-19 (with Nicolas Berman, Mathieu Couttenier & Rohit Ticku)

CEPR e-book COVID-19 in Developing Economies, Chapter 9, June 2020. French publication: Les conflits à l'heure de la Covid-19, Revue internationale de politique de développement.

This chapter discusses the potential impacts of the spread of COVID-19, and the restriction policies that it has triggered in many countries, on conflict incidence worldwide. Based on anecdotal evidence and recent research, we argue that imposing nation-wide shutdown policies diminishes conflict incidence on average, but that this conflict reduction may be short-lived and highly heterogeneous across countries. In particular, conflict does not appear to decline in poor, fractionalised countries. Evidence points to two potential ways in which COVID-related restriction policies may increase conflict: losses in income and magnified ethnic and religious tensions leading to scapegoating of minorities.



Miscellaneous

A Note on the Economics of Philanthropy (with Ugo Panizza) [Working paper] [Data]

This note starts with a short review of the economic literature on philanthropy. Next, it provides some estimates of philanthropic giving in advanced and middle-income economies and discusses how innovative financial instruments can leverage charitable giving. The note concludes with a discussion of the controversial aspects of philanthropic activities.

Prepared for the Conference Rethinking global philanthropy: Can philantrophy bridge the development gap?, October 12, 2017. Media Coverage: Le Temps.