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The economic costs of naxalite violence and the economic benefits of a unique robust security response
, Saurabh Singhal
Published in Elsevier
2011
Volume: 46
   
Pages: 1 - 34
Abstract

Using the synthetic control method of analysis, we provide the first measurements of the macroeconomic costs of Naxalite violence in India, as well as exploit a natural experiment in one of the Naxalite affected states to measure the direct economic benefits of a unique robust security response. Compared to a synthetic control region constructed from states not affected by Naxalite violence, we find that states affected by Naxalite violence lost on average 12.48% of their per capita NSDP over the period 1980 to 2000. Of the states affected by Naxalite violence, only one state i.e. Andhra Pradesh raised a specially trained and equipped police force in 1989 known as the Greyhounds, dedicated mainly to combating the Naxalite menace. Compared to a synthetic control region constructed from states affected by Naxalite violence that did not raise a specially trained anti-Naxalite police force, we find that Andhra Pradesh gained on average 17.23% of its per capita NSDP over the period 1989 to 2000. Placebo tests indicate that both results are significant. (JEL D74, F52, H56)

About the journal
JournalData powered by TypesetEuropean Journal of Political economy
PublisherData powered by TypesetElsevier
ISSN0176-2680
Open AccessYes