Politically-driven corruption is a pervasive challenge for development, but evidence of its welfare effects is scarce. Using data from a major rural road construction programme in India we document political influence in a setting where politicians have no official role in contracting decisions. Exploiting close elections to identify the causal effect of coming to power, we show that the share of contractors whose name matches that of the winning politician increases by 63% (from 4% to 6.4%). Regression discontinuity estimates at the road level show that political interference raises costs, lowers quality, and increases the likelihood that roads go missing.

Insurgents in civil conflict typically target both government forces and civilians. This paper examines a rebel group's strategic choices of its targets and the intensity of violence. In a simple theoretical framework, negative labour income shocks are predicted to: (i) increase violence against civilians to prevent them from being recruited as police informers; and (ii) increase violence against the government through increased rebel recruitment, but only if the rebels' tax base is sufficiently independent from local labour productivity. These theoretical predictions are confirmed in the context of India's Naxalite conflict between 2005 and 2010. Exploiting variation in annual rainfall in a panel of district-level casualty numbers, I find that negative rainfall shocks: (i) increase Maoist violence against civilians; (ii) increase Maoist violence against security forces, but only in those districts in which the Maoists have access to key mineral resources.

How do foreign powers disengage from a conflict? We study this issue by examining the recent, large-scale security transition from international troops to local forces in the ongoing civil conflict in Afghanistan. We construct a new dataset that combines information on this transition process with declassified conflict outcomes and previously unreleased quarterly survey data of residents’ perceptions of local security. Our empirical design leverages the staggered roll-out of the transition, and employs a novel instrumental variables approach to estimate the impact. We find a significant, sharp, and timely decline of insurgent violence in the initial phase: the security transfer to Afghan forces. We find that this is followed by a significant surge in violence in the second phase: the actual physical withdrawal of foreign troops. We argue that this pattern is consistent with a signaling model, in which the insurgents reduce violence strategically to facilitate the foreign military withdrawal to capitalize on the reduced foreign military presence afterward. Our findings clarify the destabilizing consequences of withdrawal in one of the costliest conflicts in modern history, and yield potentially actionable insights for designing future security transitions. (JEL D74, F51, F52, O17)

This paper estimates the impact of military recruitment during World War 1 on human capital accumulation in colonial Punjab. The empirical strategy exploits the exogenous increase in recruitment by the Indian Army during the war. Higher military recruitment is found to be associated with increased literacy at the district-religion level. However, military recruitment grounds did not attract higher investment in public education. Rather, the observed improvement in the human capital stock appears to be driven by the informal acquisition of literacy skills by serving soldiers. While the historical setting of World War 1 is unique, this paper is one of the rst papers to provide empirical evidence on the economic eects of military service in a developing country context.