We propose a new perspective on the challenges of building a state. We show in the context of a weak state that asserting the state can give existing armed actors   incentives to plunder. We combine data from 239 villages of eastern Congo with quasi-experimental variation induced by the completion of a  large military campaign which asserted the state's exclusive right to tax in specific villages. After the campaign was complete, and during three years, members of the  armed factions previously taxing those villages regularly attacked them. The rise is driven by violent theft operations targeting  wealthy households, and is muted for retaliatory attacks,  conquest operations, as well as for attacks by other perpetrators. The targeting is consistent with a destruction of  their incentive to refrain from violent theft. Asserting the state's exclusive right to tax increased household material welfare, by decreasing overall tax burdens, but it increased sexual violence and abductions as a byproduct of the theft operations. An alternative state building strategy based on bargaining with armed actors rather than attempting to diminish their ability to tax does not create this incentive. Our findings suggest that asserting the state by removing armed actors who have established themselves, tax, and protect, can induce a temporary trade-off between growth and safety and challenge conceptions of state power based only on monopoly of violence.

We introduced professional employment agencies to a random subset of 799 Ethiopian firms to help them find college-educated applicants. Treated firms received more college-educated applicants but were not more likely to interview or fill the vacancy. Instead, they became less optimistic about the productivity of college graduates, and a subset of them became less likely to interview and hire any college graduate. This is likely triggered by college-educated applicants with imperfect signals of their qualifications. Using a search model with imperfect information, we demonstrate that lowering search costs may be ineffective in job creation, but may still improve matching efficiency.

We study the causes of high turnover rates in a flagship industrial park in Ethiopia with detailed administrative records for 58,530 applicants during 2018--23 (1) Leveraging exogenous price shocks, we find that better outside options reduced the likelihood that applicants would take any jobs in the industrial park but did not induce current workers to separate from the industrial park. We use a standard search model to show that applicants' rejection rate can be inefficiently low. (2) Using productivity data from individual firms, we find correlational evidence that workers with lower productivity were more likely to separate. We further provide causal evidence using an information treatment that separation can be explained by learning on the job. Our model demonstrates that workers' separation rate can be inefficiently high. Our policy discussion implies a tension between improving matching efficiency and decreasing turnover.

Many developing countries are undergoing a rapid process of industrialization, yet high worker turnover rates constitute a barrier for manufacturing firms to sustain their operation. This paper studies how misperceptions about career ladder can affect turnover rates in manufacturing sector in developing countries. We conducted a field experiment in one of the main industrial parks in Ethiopia, where we document significant misperceptions about the salary trajectory and the likelihood of being promoted to higher positions. We then conduct an information treatment, where we provide accurate information on career ladder estimated using records from the industrial park, and examine how misperceptions about career ladder causally affects workers' turnover decisions. We find that optimistic updates about upper-level salary significantly increase the probability of remaining employed within the industrial park, while pessimistic updates reduce it. We find no evidence of spillover effects to control workers, suggesting informal network may not be able to fully address the information frictions. For workers with higher educational attainment and previous garment experience, providing accurate information does not drive away over-optimistic workers and instead, it decreases overall turnover rates, suggesting skilled workers may be incentivized to exert more effort and climb up the career ladder when their over-optimistic perceptions are corrected. Our findings call for firms to provide more transparency of the career ladder to address information frictions and retain skilled workers.

We use a sharp withdrawal of the state that precipitated a rise in insecurity in the Democratic Republic of the Congo to analyze the role of community in the rise of militias. Through a range of data collection techniques, we find that the withdrawal led to a spectacular rise and growth in militia village chapters that were supported by the communities to fight the instigators of that insecurity. While some of this growth can be attributed to the release of pent-up revenge motivations among previously victimized households, the extraordinary expansion is driven by communities facing a sharp new increase in insecurity as a result of the withdrawal, highlighting the perceived value of community security. In these villages, community members were propelled to join the newly formed militia chapters by both intrinsic and extrinsic social motivations, including the desire to protect their community and concerns about social status. Moreover, this rise is accentuated in villages where the local elite mobilizes informal community mechanisms in response to the heightened insecurity, upholding informal norms and amplifying intrinsic social motivations to join among community members. These findings offer a new perspective on militia emergence, emphasizing the role of social motivations and of community, and nuancing the distinction between economic and noneconomic incentives, consistent with an extensive literature using qualitative methods.