American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Fostering Cooperation: The Conflict-Reducing Effects of Intervillage Competition for Government Transfers
American Economic Journal: Applied Economics
(pp. 283–321)
Abstract
We examine the effect of intergroup 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.Citation
Garg, Teevrat, Caterina Gennaioli, Stefania Lovo, and Gregor Singer. 2026. "Fostering Cooperation: The Conflict-Reducing Effects of Intervillage Competition for Government Transfers." American Economic Journal: Applied Economics 18 (3): 283–321. DOI: 10.1257/app.20240377Additional Materials
JEL Classification
- D74 Conflict; Conflict Resolution; Alliances; Revolutions
- H70 State and Local Government; Intergovernmental Relations: General
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- Z13 Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification