From People’s War to People’s Rule: Rebel Governance and the Foundations of Inclusive Democracy

Bhishma Bhusal, Michael Callen, Rohini Pande, Soledad Prillaman, Deepak Singhania and Apurva Subedi

No 21532, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: How does wartime rebel governance shape post-conflict institutions? We study this in Nepal, where the Maoist People's War (1996–2006) dismantled a 240-year caste-based monarchy and ended with Maoists entering democratic politics. During the conflict, Maoists established sub-national ``People’s Governments" that administered justice, collected taxes, and delivered local services. Using a spatial regression-discontinuity design, we show that exposure to People's Governments increased political knowledge and participation especially among historically marginalized indigenous groups (Janajatis). Exposure also reshaped party institutions and inter-party competition: candidate-selection committees in more exposed areas have 26 percent more Janajati members who, drawing on novel implicit-attitude data, exhibit less pro-upper caste bias. Non-Maoist parties' Janajati nomination rates nearly double in fully exposed areas, consistent with competition for newly mobilized voters. Nearly two decades on, local governments in exposed areas score 0.2–0.3 standard deviations higher on state capacity indices and receive 13 percent more in conditional federal grants. These findings show that when rebel groups enter competitive democratic politics, wartime governance institutions can — through citizen mobilization, party gatekeeping, and cross-party competition — enable a more inclusive and capable post-war state.

Keywords: Conflict; Political selection; State capacity; Institutions; Nepal (search for similar items in EconPapers)
JEL-codes: D72 D73 H11 O12 O17 Z13 (search for similar items in EconPapers)
Date: 2026-05
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