Fiscal incentives for conflict: Evidence from India’s Red Corridor

Jacob N. Shapiro and Oliver Vanden Eynde

No 2102, CEPREMAP Working Papers (Docweb) from CEPREMAP

Abstract: Can tax regimes shape the incentives to engage in armed conflict? Indian mining royaltiesbenefit the States, but are set by the central government. India's Maoist belt is mineral-rich, and States are responsible for counterinsurgency operations. We exploit the introduction of a 10% ad valoremvtax on iron ore that increased royalty collections of the affected states by a factor of 10. We find that the royalty hike was followed by a significant intensification of violence in districts with importantiron ore deposits. The royalty increase was also followed by an increase in illegal mining activity in iron mines.

Keywords: Counterinsurgency; Civil Conflict; Natural Resources (search for similar items in EconPapers)
Pages: 51 pages
Date: 2021-04
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Fiscal Incentives for Conflict: Evidence from India's Red Corridor (2023)
Working Paper: Fiscal Incentives for Conflict: Evidence from India's Red Corridor (2023)
Working Paper: Fiscal Incentives for Conflict: Evidence from India's Red Corridor (2023)
Working Paper: Fiscal Incentives for Conflict: Evidence from India's Red Corridor (2020)
Working Paper: Fiscal Incentives for Conflict: Evidence from India's Red Corridor (2020)
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