Wednesday, January 07, 2009

Buying Growth, Buying Hearts

Can Hearts and Minds Be Bought? The Economics of Counterinsurgency in Iraq

Eli Berman, Jacob Shapiro & Joseph Felter
NBER Working Paper, December 2008

Rebuilding social and economic order in conflict and post-conflict areas will be critical for the United States and allied governments for the foreseeable future. Little empirical research has evaluated where, when, and how improving material conditions in conflict zones enhances social and economic order. We address this lacuna, developing and testing a theory of insurgency. Following the informal literature and US military doctrine, we model insurgency as a three-way contest between rebels seeking political change through violence, a government seeking to minimize violence through some combination of service provision and hard counterinsurgency, and civilians deciding whether to share information about insurgents with government forces. We test the model using new data from the Iraq war. We combine a geo-spatial indicator of violence against Coalition and Iraqi forces (SIGACTs), reconstruction spending, and community characteristics including measures of social cohesion, sectarian status, socio-economic grievances, and natural resource endowments. Our results support the theory's predictions: counterinsurgents are most generous with government services in locations where they expect violence; improved service provision has reduced insurgent violence since the summer of 2007; and the violence-reducing effect of service provision varies predictably across communities.

Dictators, development, and the virtue of political instability

Ronen Bar-El
Public Choice, January 2009, Pages 29-44

A large body of literature stresses the benefits of regime stability for economic growth in poor countries. This view, however, discounts the gains from threats to regime security when populations living under dictatorial regimes cannot benefit from the disciplining of political competition available to voters in democracies. This paper applies a model of economic growth to study the sources of the differences in economic performance and repression policy among dictatorships as well as the parallel in dictatorial regimes of the benefits achieved through political competition in democracies. Threats to the security of dictatorial regimes are shown to be a means of benefiting the population through the responses of the regime.

(Nod to KL)


Nathanael D Snow said...

Of course, if we had offered each of the Iraqi's some of the $30,000 per man, woman, and child we have spent on this war so far, maybe they would have preferred to move here instead.

Anonymous said...

A Credit Free, Free Market Economy is Possible.

Both Dynamic on the Short Run & Stable on the Long Run.


The Numbered Account.

The Credit Free Money: The Dinar Shekel.

Asset Transfer: The Right Grant Operation.

A Specific Application of Employment Interest and Money (For Economists).

In This Age of Turbulence People Want an Exit Strategy Out of Credit
An Adventure in a New World Economic Order.

The alternative would be to wait till, on the long run, most of our productive assets get physically destroyed either by war or by rust.

Let me give you a link to the press release of my open letter to Chairman Ben S. Bernanke.

Chairman Ben S. Bernanke, A Credit Free, Free Market Economy is Possible.
(Release Time Wednesday 7 January 14:11 GMT)

MC Shalom P. Hamou
Chief Economist - Master Conductor
1776 - Annuit Cœptis.