TY - JOUR
T1 - FISCAL INCENTIVES FOR CONFLICT
T2 - EVIDENCE FROM INDIA’S RED CORRIDOR
AU - Shapiro, Jacob N.
AU - Vanden Eynde, Oliver
N1 - Publisher Copyright:
© 2021 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.
PY - 2023/1
Y1 - 2023/1
N2 - —Can tax regimes shape the incentives to engage in armed con-flict? Indian mining royalties benefit the states but are set by the central government. India’s Maoist belt is mineral rich, and states are responsible for counterinsurgency operations. We exploit the introduction of a 10% ad valorem tax on iron ore that increased royalty collections of the affected states by a factor of 10. We find that the royalty hike was followed by a significant intensification of violence in districts with important iron ore deposits. The royalty increase was also followed by an increase in illegal mining activity in iron mines.
AB - —Can tax regimes shape the incentives to engage in armed con-flict? Indian mining royalties benefit the states but are set by the central government. India’s Maoist belt is mineral rich, and states are responsible for counterinsurgency operations. We exploit the introduction of a 10% ad valorem tax on iron ore that increased royalty collections of the affected states by a factor of 10. We find that the royalty hike was followed by a significant intensification of violence in districts with important iron ore deposits. The royalty increase was also followed by an increase in illegal mining activity in iron mines.
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U2 - 10.1162/rest_a_01039
DO - 10.1162/rest_a_01039
M3 - Article
AN - SCOPUS:85146279847
SN - 0034-6535
VL - 105
SP - 217
EP - 225
JO - Review of Economics and Statistics
JF - Review of Economics and Statistics
IS - 1
ER -