Abstract
We examine the role of development in signalling governmental benevolence, thereby helping governments combat insurgency in conflict-ridden areas. While there is some literature on the role of development in mitigating conflict, very few studies examine the channel which is our focus, namely popular perception. With popular support being a core ingredient of any successful counter-insurgency program in conflict-ridden areas, investing in development becomes a vital tool in winning hearts and minds of the people, and consequently in controlling insurgency. Using a signalling game setup, we find that allowing for this possibility leads to higher investment in development relative to the socially efficient outcome. Finally, developmental projects that have greater effect on popular perception, e.g. those that are likely to get greater media coverage, or those with quick returns, get prioritized. • We examine the role of development in signalling governmental benevolence. • It helps win hearts and minds in conflict-ridden areas thus controlling insurgency. • There is higher investment in development relative to the socially efficient level. • The higher investment in development reduces military and rebel expenditure. • Developmental projects that have greater effect on popular perception get priority.
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