A “hearts and minds” model of conflict posits that development aid, by bringing tangible benefits, will increase population support for the government. This increased support in turn can lead to a decrease in violence, partly through a rise in population cooperation and information sharing with the government. At least one previous observational study in Iraq  found that development aid is indeed associated with a decrease in conflict. A very recent working paper approaches the same question through an evaluation of community development programs in the Philippines  and explores whether these local aid activities increase or decrease insurgent violence. Interestingly, the study identifies a significant increase in violence during the implementation period of the aid program.
The study, by Benjamin Crost (University of Colorado Denver), Joseph Felter (Stanford University), and Patrick Johnston (RAND Corporation), covers the first six years of a widespread community development program known by the acronym KALAHI-CIDSS. In part financed by the World Bank, the program began in 2003 and by 2009 had operated in 4000 villages located in 184 municipalities across 40 provinces in both conflict and non-conflict areas. KALAHI supports local infrastructure and institution-building activities through block grants given to municipalities. Eligible municipalities were determined by a municipal level poverty score where the lowest 25% of municipalities in each province were invited to participate in the program. The transfers were substantial – grant size totaled 15% of the average municipality’s annual budget.
The Philippines is a setting where relatively low-levels of insurgent violence have simmered for quite some time. The two largest insurgent groups in the country over the study period were the New People’s Army, a militant wing of the Communist Party, and the Moro Islamic Liberation Front. Various smaller groups were also somewhat active. A real strength of this study is the use of micro data on the incidence and extent of insurgent conflict. Most conflict data exist only in aggregate form, such as battle deaths per country-year, and thus cannot speak to the impacts of micro-level interventions. In this case the authors compiled data from all official reports of conflict incidents that involved the Philippines Armed Forces over the period 2001 – 2008.
The authors leverage program assignment by poverty score to identify program impact on local violence through a Regression Discontinuity Design. Familiar to many of our readers, this method assumes that municipalities on either side of the eligibility threshold do not differ with respect to any observed or unobserved factor that may cause conflict. (Initial data checks do confirm that the municipalities in the vicinity of the cut-off score do not differ across observable dimensions.)
What did the authors find? It turns out that KALAHI municipalities experienced a statistically significant increase in violence compared to non-eligible areas. Moreover the timing of the violence is rather remarkable – while equal levels of violence are seen in treatment and control areas before the project start date, violence ticks up soon after the start of local project preparation. The level of violence remains elevated until the project ends whereupon violence declines to the level measured in non-project municipalities. The estimates suggest that, over the three year lifecycle of a project, treated municipalities experienced an additional 3 casualties due to insurgency related violence.
Because conflict is not in every municipality, in fact it occurs in only a minority of municipalities, the impact estimates are identified off of comparatively few observations. Nevertheless the results are precisely estimated and are robust to alternative conflict measures. For example a KALAHI project increases the likelihood of having any conflict related casualties (a measure less sensitive to outliers than the casualty count) by 13 percentage points, which is quite a large increase since the mean likelihood of any casualty related violence is 29%.
To explain these seemingly counter-intuitive results, the authors sketch a theoretical framework where development projects may induce conflict if (1) the completion of a successful project will shift population sentiment towards the government and (2) violent action by insurgents has some likelihood of derailing the project. The observed timing of violence is exactly as Crost, Felter, and Johnston predict since it is only during the project implementation period when insurgents can hinder the likelihood of successful implementation.
Aid programs take on various shapes and sizes. Might all aid projects in conflict settings bring an increased chance of violence? Not necessarily. The authors predict that development projects would only cause violence if insurgents have the ability to derail them. It may be that local infrastructure investments are relatively easy to disrupt through violence or the threat of violence (at the very least these projects present a tangible target). Many other common development programs, such as agricultural input subsidies or conditional cash transfers, are much more costly to disrupt since the beneficiaries are widespread as well as harder to identify. Consequently we would expect a temporary increase in violence around only some types of local development projects. In the coming years I am sure that other evidence will emerge to test this proposition.