Working Paper: NBER ID: w28631
Authors: Soeren J. Henn; Christian Mastaki Mugaruka; Miguel Ortiz; Raul Sanchez de la Sierra; David Qihang Wu
Abstract: This study presents a new economic perspective on state-building based on a case study in the Democratic Republic of the Congo’s hinterland. We explore the implications for the state of considering rebels as stationary bandits. When the state, through a military operation, made it impossible for rebels to levy taxes, it inadvertently encouraged them to plunder the assets of the very citizens they previously preferred to tax. When it negotiated with rebels instead, this effect was absent, but negotiating compromised the state’s legitimacy and prompted the emergence of new rebels. The findings suggest that attempting to increase taxation by a weak state in the hinterland could come at the expense of safety in the medium term and of the integrity of the state in the long term.
Keywords: stationary bandits; property rights; time horizon
JEL Codes: H20; H55; P26; P48
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| security of property rights over stealing (P14) | economic behavior of armed actors (D74) |
| 2009 military operation, Kimia II (H56) | violent expropriation by FDLR (P26) |
| loss of secure property rights (P14) | violent expropriation by FDLR (P26) |
| security of property rights over stealing (P14) | refrain from arbitrary theft (P14) |
| FDLR's perception of secure property rights (P14) | state functions (tax collection and protection) (H10) |