Contestable Monopolies on Violence: Polycentricity, Rebel Groups and Institutional Quality

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ABSTRACT Competition is widely seen as a driver of improvements in institutional quality. We consider the robustness of competition, namely, polycentricity, in the form of the creation of institutions built by rebel groups in the course of civil war. In a variety of panel regressions and synthetic control specifications, we find minor evidence suggesting small beneficial effects of rebel institutions on state institutional quality. These effects, however, are not at all robust. Given that most conceptions of competition within economics involve incumbents hostile to new entrants, we view our findings as relevant for any complete statement on the effects of polycentricity.