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The economic effects of a counterinsurgency policy in India: A synthetic control analysis

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  • Singhal, Saurabh
  • Nilakantan, Rahul

Abstract

Using the synthetic control method, we analyze the economic effects of a unique counterinsurgency response to the Naxalite insurgency in India. Of all the states affected by Naxalite violence, only one state, Andhra Pradesh, raised a specially trained and equipped police force in 1989 known as the Greyhounds, dedicated to combating the Naxalite insurgency. Compared to a synthetic control region constructed from states affected by Naxalite violence that did not raise a similar police force, we find that the per capita NSDP of Andhra Pradesh increased significantly over the period 1989–2000. Further, we find that the effects on the manufacturing sector are particularly strong. Placebo tests indicate that these results are credible and various difference-in-difference specifications using state and industry level panel data further corroborate these findings.

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  • Singhal, Saurabh & Nilakantan, Rahul, 2016. "The economic effects of a counterinsurgency policy in India: A synthetic control analysis," European Journal of Political Economy, Elsevier, vol. 45(C), pages 1-17.
    • Handle: RePEc:eee:poleco:v:45:y:2016:i:c:p:1-17
    DOI: 10.1016/j.ejpoleco.2016.08.012
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    More about this item

    Keywords

    Synthetic control method; Counterinsurgency; Conflict; Naxalite insurgency; India;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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