“…(Barzel, 2002, p. 22) argues "The state consists of ... a territory where these individuals reside, demarcated by the reach of the enforcer's power". This is reflected even in the dictionary definition of territory as "a geographic area belonging to or under the jurisdiction of a governmental authority " https://www.merriam-webster.com/dictionary/territory.5 We build on a burgeoning economics literature incorporating geography into both empirical and theoretical models of political violence(Berman and Couttenier, 2015;Dow et al, 2017;Adamson, 2018). But this paper also has ties to industrial organization -in particular, to the literature on local monopoly(Maskin and Tirole, 1988).…”