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Pré-Publication, Document De Travail Année : 2020

Fiscal Incentives for Conflict: Evidence from India's Red Corridor

Résumé

Can tax regimes shape the incentives to engage in armed conflict? 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 counter-insurgency 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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Dates et versions

halshs-02921132 , version 1 (24-08-2020)
halshs-02921132 , version 2 (12-12-2020)

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  • HAL Id : halshs-02921132 , version 2

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Jacob N Shapiro, Oliver Vanden Eynde. Fiscal Incentives for Conflict: Evidence from India's Red Corridor. 2020. ⟨halshs-02921132v2⟩
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