ECONOMIC CONDITIONS, Lakshmi Iyer (Harvard … Iyer (Harvard Business School) Impact and Policy...

Lakshmi Iyer

(Harvard Business School)

Impact and Policy Conference 2012

ECONOMIC CONDITIONS,

POLITICAL INSTITUTIONS

AND CONFLICT

Inter-state aka war

Intra-state/internal

Civil war

Terrorism

People-to-people

Organized crime

Targeting specific sections of society

Women

Religious minorities

CONFLICT: MANY TYPES

Inter-state aka war

Intra-state/internal

Civil war

Terrorism

People-to-people

Organized crime

Targeting specific sections of society

Women

Religious minorities

CONFLICT: MANY TYPES

0

10

20

30

40

50

60

Countries with external conflict Countries with internal conflict

INTERNAL CONFLICT IS BECOMING MORE

COMMON THAN INTER-STATE CONFLICT

Source: Author’s calculations from UCDP/PRIO Armed Conflict Dataset Version 4-2012 Conflict is defined as “A contested incompatibility that concerns government and/or territory where the use of armed

force between two parties, of which at least one is the government of a state, results in at least 25 battle-related

deaths.”

0

5

10

15

20

25

30

35

40

45

Conflicts with 25-999 deaths Conflicts with at least 1000 deaths

LOW-LEVEL CONFLICTS ARE BECOMING

MORE WIDESPREAD

Source: Author’s calculations from UCDP/PRIO Armed Conflict Dataset Version 4-

2012

Bangladesh

India

Nepal

Pakistan

Sri Lanka

-8-6

-4-2

02

Log(

conf

lict d

eath

s pe

r ca

pita

, 199

8-20

04)

6 7 8 9 10 11Log GDP per capita 1998 (PPP)

ECONOMIC ROOTS: POOR COUNTRIES

EXPERIENCE MORE INTERNAL CONFLICT

Source: Iyer (2011).

Conflict data is from Global Terrorism Database 2. GDP and population data from World Development

Indicators.

AchhamArghakhanchi

Baglung BaitadiBajhang

BajuraBanke

Bara

Bardiya

Bhaktapur

Bhojpur

Chitawan

Dadeldhura Dailekh

Dang

DarchulaDhading

DhankutaDhanusa

DolakhaDotiGorkha

Gulmi

HumlaIlam

Jajarkot

Jhapa

Jumla

Kailali

Kalikot

Kanchanpur

KapilbastuKaskiKathmandu

KavrepalanchokKhotang

Lalitpur

Lamjung

Mahottari

Makwanpur

Manang

Morang

Mugu

Myagdi

NawalparasiNuwakot

Okhaldhunga

PalpaPanchthar Parbat

ParsaPyuthan

Ramechhap

Rautahat

Rolpa

Rukum

Rupandehi

Salyan

Sankhuwasabha

SaptariSarlahi

SindhuliSindhupalchok

Siraha

Solukhumbu

Sunsari

Surkhet

SyangjaTanahu

TaplejungTerhathum

Udayapur

02

46

0 .2 .4 .6 .8 1Poverty rate 1995-96

Conflict deaths per 1000 population Fitted values

POOR REGIONS WITHIN COUNTRIES

EXPERIENCE MORE CONFLICT: NEPAL

Conflict deaths in Nepal’s civil war 1996-2006

Source: Do and Iyer (2010).

Notes: Conflict data collected at district level by the Informal Sector Service Center,

Kathmandu. Poverty rate from Nepal Living Standards Survey, 1995-96.

0

500

1000

1500

2000

2500

Poverty<20% 20%<Poverty <=40% Poverty>40%

# conflict deaths per 1000 population 1998-2007

POVERTY AND CONFLICT ACROSS INDIAN

DISTRICTS

Source: Iyer (2011). Notes: Conflict data is from the RAND-MIPT Terrorism Incident Database (1998-2007). Conflict is defined as “Violence

calculated to create an atmosphere of fear and alarm to coerce others into actions they would not otherwise

undertake, or refrain from actions they desired to take. Acts of terrorism are generally directed against civilian

targets.” District level poverty rates are Head Count Ratios (percentage of population below the state-specified poverty

line) computed from National Sample Surveys 1999-2000.

Mandated political representation of women increasingly

common

India’s Panchayati Raj: 1/3rd of all local (district/village) councils to

consist of women

50% in Afghanistan village development councils (Fotini et al, 2012)

Many other developed and developing countries have gender quotas

for elected officials.

Panchayati Raj elections in India held at dif ferent dates by

dif ferent states.

Can assess the effect by comparing states before and after

women gain such representation.

POLITICAL EMPOWERMENT OF TARGETED

GROUPS

EFFECTS OF FEMALE POLITICAL

REPRESENTATION IN INDIA

Source: Iyer et al (2012). Crime data obtained from National Crime Records Bureau, New Delhi.

Crime variables are number of crimes per 1000 population (gender-specific population for gender-specific crimes).

Results control for demographic characteristics, real per capita state GDP, policy strength per capita, state and year fixed

effects and state-specific time trends.

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

% Change after Panchayati Raj Implementation

CRIMES AGAINST WOMEN OTHER CRIMES ARRESTS FOR CRIMES

AGAINST WOMEN

• Evidence from two newly created databases Religious identity of state level legislators (based on names)

Incidents of Hindu-Muslim violence based on news reports in the Times of India (extend the Varshney-Wilkinson database from 1995 to 2010).

Episodes of religious violence are not rare in India: Hindu-Muslim riots occurred in every year over the period 1980-2007, and in all but two states.

On average, 7-8% of state legislators; this is below the Muslim population share of 13%.

There is a decline in the occurrence of Hindu -Muslim riots after 1992 (except for the events of 2002 in Gujarat).

WHAT ABOUT POLITICAL REPRESENTATION

OF RELIGIOUS MINORITIES?

What is the impact of having a Muslim MLA on the

probability of occurrence of a Hindu -Muslim riot?

Confounding factors: places which elect Muslim MLAs might

be very dif ferent from places which do not.

We will therefore compare places where Muslim candidates

narrowly won elections to places where Muslim candidates

narrowly lost, as a means of controlling for such

unobservable dif ferences across dif ferent areas.

MUSLIM LEGISLATORS AND HINDU-

MUSLIM VIOLENCE

Sample All districts Districts with close elections between Muslims and

non-Muslims

Vote margin to define close elections 5% 3% 2%

Average probability of riot in sample 5.8% 9.5% 9.5% 8.4%

Effect of having a Muslim MLA in the district 0.3% -1.0% -4.5% -6.0%

MUSLIM LEGISLATORS AND HINDU-MUSLIM

VIOLENCE (PRELIMINARY EVIDENCE)

Source: Bhalotra, Clots-Figueras and Iyer, 2012. Effect of having a Muslim MLA is computed from regressions which control for year and district fixed effects.

Internal conflict/civil war has strong economic roots.

Political representation can be an effective means to protect

targeted communities.

Rebuilding economic growth and political institutions are

likely to be instrumental in preventing further conflict.

But these are big challenges in post -conflict environments.

Survey data from South Asian countries indicates the

following characteristics of job markets in conflict zones:

Preponderance of agricultural jobs and a lack of manufacturing and

construction jobs.

Education and skill deficits among the workforce.

Greater labor force participation, but a large incidence of unpaid and

casual jobs.

POLICY CONCLUSIONS

Source: Iyer and Santos (2012).

Bhalotra, Sonia, Irma Clots-Figueras and Lakshmi Iyer (2012),

“Politician Identity and Religious Violence,” Work in Progress.

Do, Quy Toan and Lakshmi Iyer (2010), “Geography, Poverty and

Conflict in Nepal.” Journal of Peace Research , 47 (6), 2010.

Iyer, Lakshmi (2011), “Managing Conflict.” In Ejaz Ghani, ed.,

Reshaping Tomorrow: Is South Asia Ready for the Big Leap? ,

Oxford University Press.

Iyer, Lakshmi, Anandi Mani, Prachi Mishra and Petia Topalova

(2012), “The Power of Political Voice: Women's Political

Representation and Crime in India." American Economic Journal:

Applied Economics (forthcoming).

Iyer, Lakshmi and Indhira Santos, 2012. “Creating Jobs in South

Asia’s Conflict Zones.” World Bank Policy Research Working

Paper WPS 6104.

PAPERS CITED

RECONSTRUCTING INSTITUTIONS AFTER VIOLENT CONFLICT

F O T I N I C H R I S T I A , M I T

Bangkok

2012

MOTIVATION

• Presumed causal link between institutional quality

and development.

• Post-conflict areas replete with new institutional

designs.

• Context renders assessment highly cumbersome.

• As a result, lack of consistent rigorous empirical

evidence on institutional effect on governance,

broader stability and economic well being.

VARIATION IN INSTITUTIONAL QUESTIONS OF INTEREST

• Afghanistan (with Andrew Beath (WB) and Ruben Enikolopov (NES))

• Counterinsurgency Context

• Institution under Evaluation: CDD Program

• Bosnia-Herzegovina (with Marc Alexander (Stanford)

• Ethnic Reintegration Context

• Institution under Evaluation: First Integrated School

OPERATIONALIZATION

Country Units Partners Funding Years $

Afghanistan 500 villages;

~15,000

respondents

MRRD; WB; 7

local & intl.

NGOs

MRRD; WB;

USAID;

UNWFP;

CIDA; IGC

5 2 M

Bosnia and

Herzegovina

3 schools;

244 students

Mostar

Municipality;

OSCE

Russel Sage;

Harvard Univ.

1 15K

AFGHANISTAN: CDD PROGRAM

• The National Solidarity Program (NSP) is Afghanistan’s largest development Program.

• Present in over 29,000 of Afghanistan’s 38,000 villages.

• Sponsored by international donors and run by MRRD.

• Implemented by NGOs in two main stages:

• Election of Community Development Councils (CDCs) through secret-ballot election.

• Project Selection.

Similarity of Treatment

and Control Villages

Create

CDCs

Treatment

Villages

(NSP)

Select

Projects

Implement

Projects Projects

Finished

Control

Villages (Non-NSP)

May – Oct. 2009 May-Nov. 2011

Interim Estimates Final Estimates

Baseline

Survey

Aug. – Sep. 2007

1st

Follow-

Up

Survey

2nd Follow-

Up Survey

followed by

Wheat

Distribution

The evaluation estimates impacts by collecting data over four years in 500 villages:

250 NSP (treatment) & 250 non-NSP (control)

Structure of Evaluation and Data Collection

SUBTREATMENT INTERVENTIONS

• Comparing two ways

of electing councils

• Single Member Districts

• Multi-member Districts

• Comparing two ways of

selecting projects

• Referendum

• Community Consultation

Meeting

QUESTIONS FOR CDD EVALUATION

• Random assignment allowed us to examine range of

impact-related questions:

• Both substantive:

• Can development aid reduce insecurity?

• Can development aid improve women’s lives?

• And operational:

• Do electoral rules affect who gets elected?

• Does method of project selection affect capture of resources?

NSP’S INTERIM IMPACTS

• NSP reduces insecurity by “winning hearts and minds.”

• NSP improves women’s economic and social status in the community.

• Higher quality council members if elected in multi-member districts.

• Lower levels of elite capture if projects selected via referenda.

NSP BEHAVIORAL INTERVENTION

• Additional behavioral intervention to triangulate

attitudinal results.

• Instead of behavioral games, we measured behaviors

through real life event in rural Afghanistan.

• Compared outcomes in targeting and corruption

during a food aid distribution, in villages with

customary governance structures versus villages with

democratically elected councils.

NSP BEHAVIORAL INTERVENTION FINDINGS

• Existence of multiple institutional structures can lead

to institutional competition and underperformance.

• When in the lead, better aid targeting and higher

participation.

• When not in the lead, higher levels of embezzlement

and lower levels of participation.

OTHER RANDOMIZED CDD EVALUATIONS

• CDD increasingly popular: US$1.3 billion per year in lending in 2000-2008 by WB towards ~50 CDD projects.

• Fearon et al (2009) in Liberia find little impact on economic well being but some on governance.

• Barron et al (2009) in Indonesia and Casey et al (2011) in Sierra Leone identify some positive effects on economic outcomes but none on sociopolitical measures.

• Humphreys et al (2012) in DRC find no effect.

BOSNIA: SCHOOL INTEGRATION

• Does post-conflict institutional integration improve inter-ethnic cooperation?

• Partial integration of high schools leaving student allocation to segregated or integrated environment to chance.

• N-person public goods game to assess institutional effect on people’s willingness to contribute to a public good.

FINDINGS OF SCHOOL INTEGRATION ON PUBLIC GOODS PROVISION IN

BOSNIA • On average, integrated

institutions significantly increase contribution to public goods.

• Availability of sanctions in integrated institutions drives up contributions significantly but has no such effect in segregated institutions.

• Diversity of groups leads to lower public goods contribution only in the context of segregated institutions.

OTHER STUDIES

• RCTs on peer effects, teacher pupil ratios, teacher

incentives, teacher performance, report cards,

uniforms, textbooks, school meals, primary school

deworming, educational incentives for parents and

children. But not in conflict contexts.

• Exception: Burde and Linden (2012)who find that in

Afghanistan village-based schools in villages that

lack public schools, significantly increase enrollment

and test scores and eliminate gender disparity.

ISSUES AND RECOMMENDATIONS

NO ONE-SIZE-FITS-ALL INSTITUTIONAL INTERVENTION

• Fetishization of new institutional frameworks post

conflict, with emphasis on representation.

• New institutions not necessarily a panacea as

indicated by variant results of CDD impact.

• Focus should be placed on specific contextual

needs and interventions that also look to existing

institutional frameworks and interactions between

old and new.

PARTNERSHIP WITH ACADEMICS

• Organizations faced with post-conflict challenges often find it too cumbersome to pursue rigorous evaluation for their projects.

• Opportunities for organizations to link up with academics who can design optimal evaluation relevant to the context taking advantage of existing discontinuities and exogenous variation.

• Academics can also raise considerable funds, allowing program to afford better assessment than its budget would allow.

BETTER COORDINATION FOR REPLICATION

• Hard to generalize or even compare findings of

studies that look at post-conflict institutions as

different:

• Context

• Intervention

• Measures

• Replication remains very important and requires

higher levels of coordination in interventions studied

as well as in indicators and measures employed.

MORE SHARING

• Notable progress in sharing research designs.

• Posting of pre-analysis plans also important in protecting from data mining and reporting bias.

• But too many people in the field still facing same logistical and operational problems because not enough discussion on realities of implementation in post-conflict context.

• EGAP, JPAL and other venues should encourage more public sharing on field challenges pertaining to better access, more appropriate enumeration, better human subjects protection.

Reintegrating Combatants into Civilian Life

Cyrus Samii, New York University

Rigorous evaluations of reintegration programs

• Humphreys & Weinstein

(2007, Sierra Leone)

• Annan, Blattman, Carlson &

Mazurana (2007, Uganda)

• Barron, Humphreys, Paler &

Weinstein (2009, Aceh)

• Gilligan, Mvukiyehe & Samii

(2012, Burundi)

• Blattman & Annan (2012,

Liberia)

• Studies involved university,

IGO, and NGO partnerships.

• Study costs varied from tens

of thousands to hundreds of

thousands.

Typical program concept: first generation

economic integration

inputs

political integration

Typical program concept: critiques

economic integration

inputs

political integration

context:

social

economic

psychological

Typical program concept: second generation

economic integration

inputs

political integration

context:

social

economic

psychological

Evaluating the program concept

economic integration

inputs

political integration

context:

social

economic

psychological

Evaluating the program concept

economic integration

inputs

political integration

context:

social

economic

psychological

• Studies in Burundi, Liberia, and Sierra Leone.

Evaluating the program concept

economic integration

inputs

political integration

context:

social

economic

psychological

• Positive impact with poverty reduction, quality of livelihood

(Burundi, Liberia).

Evaluating the program concept

economic integration

inputs

political integration

context:

social

economic

psychological

• Positive impact with poverty reduction, quality of livelihood

(Burundi, Liberia).

• No “downstream” effect in Burundi, and Sierra Leone,

economic & political outcomes uncorrelated. But in Liberia,

some evidence that jobs deters participate in violence.

Evaluating the program concept

economic integration

inputs

political integration

context:

social

economic

psychological

• Positive impact with poverty reduction, quality of livelihood

(Burundi, Liberia).

• No “downstream” effect in Burundi, and Sierra Leone,

economic & political outcomes uncorrelated. But in Liberia,

some evidence that jobs deters participate in violence.

Evaluating the program concept

economic integration

inputs

political integration

context:

social

economic

psychological

• Studies in Sierra Leone and Uganda.

Evaluating the program concept

economic integration

inputs

political integration

context:

social

economic

psychological

• Abusiveness of faction predicted social acceptance (Sierra

Leone), but not economic or political outcomes.

• Social uncorrelated with economic or political (Sierra Leone).

• Emphasis on psych. factors seems misplaced (Uganda).

Evaluating the program concept

economic integration

inputs

political integration

context:

social

economic

psychological

• Studies in Aceh and auxiliary evidence from Burundi.

Evaluating the program concept

economic integration

inputs

political integration

context:

social

economic

psychological

• Community perceptions of ex-combatants were actually

worsened by CDD programming.

• In Burundi, coordination of community-based and individual

based programming failed (major time gaps).

Evaluating the program concept

economic integration

inputs

political integration

context:

social

economic

psychological

Implications

• For policy:

– We are pretty good at livelihood enhancement, but it’s not clear that

how much this contributes to political integration. We need more

study of the latter.

– We have failed to understand or find ways to contribute to producing

social contexts more conducive to integration.

• In building knowledge capacity:

– Despite the sensitive contexts, rigorous research can be done to

study program concepts for combatant reintegration.

– The results so far indicate that much more study is indeed needed to

ensure limited programming resources are applied efficiently.