Fostering cooperation: the conflict-reducing effects of inter-village competition for government transfers

Garg, Teevrat, Gennaioli, Caterina, Lovo, Stefania and Singer, Gregor ORCID: 0000-0001-5917-0723 (2025) Fostering cooperation: the conflict-reducing effects of inter-village competition for government transfers. American Economic Journal: Applied Economics. ISSN 1945-7782 (In Press)

Text (GGLS_Competition_Conflict) - Accepted Version Pending embargo until 1 January 2100. Available under License Creative Commons Attribution. Download (1MB)

Abstract

We examine the effect of inter-group competition on within-group violent conflict in Indonesia. Using a triple-differences design, we find that higher competition for national government transfers between villages reduces within-village conflict. These effects persist regardless of the competition’s outcome, are stronger in ethnically fractionalized and segregated villages, and are accompanied by higher attendance in village meetings. Our results are consistent with external competition favoring participation and cooperation within otherwise divided communities, suggesting that economic incentives to compete with out-groups combined with forms of civic engagement can be important mechanisms to reduce violence within communities.

Item Type:	Article
Additional Information:	© 2025 The Author(s)
Divisions:	Grantham Research Institute
Subjects:	J Political Science H Social Sciences > HB Economic Theory
JEL classification:	D - Microeconomics > D7 - Analysis of Collective Decision-Making > D74 - Conflict; Conflict Resolution; Alliances O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development H - Public Economics > H4 - Publicly Provided Goods > H40 - General
Date Deposited:	10 Oct 2025 11:27
Last Modified:	14 Oct 2025 17:51
URI:	http://eprints.lse.ac.uk/id/eprint/129782

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