Working Paper: CEPR ID: DP17912
Authors: Patrick Premand; Dominic Rohner
Abstract: Conflict undermines development, while poverty, in turn, breeds conflict. Policy interventions such as cash transfers could lower engagement in conflict by raising poor households' welfare and productivity. However, cash transfers may also trigger appropriation or looting of cash or assets. The expansion of government programs may further attract attacks to undermine state legitimacy. To investigate the net effect across these forces, this paper studies the impact of cash transfers on conflict in Niger. The analysis relies on the large-scale randomization of a government-led cash transfer program among nearly 4,000 villages over seven years, combined with geo-referenced conflict events that draw on media and nongovernmental organization reports from a wide variety of international and domestic sources. The findings show that cash transfers did not result in greater pacification but—if anything—triggered a short-term increase in conflict events, which were to a large extent driven by terrorist attacks by foreign rebel groups (such as Boko Haram) that could have incentives to “sabotage” successful government programs.
Keywords: Conflict; Terrorism; Cash Transfers; Sahel
JEL Codes: D74; I38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| cash transfers (F24) | conflict events (D74) |
| cash transfers (F24) | lootable wealth (D14) |
| lootable wealth (D14) | conflict events (D74) |
| cash transfers (F24) | opportunity cost of conflict (D74) |
| opportunity cost of conflict (D74) | conflict events (D74) |
| international terrorist groups (F53) | conflict events (D74) |
| cash transfers (F24) | undermining government programs (H53) |