Guns and Butter? Fighting Violence with the Promise of Development

There is a growing awareness that government programs may be important in the fight against internal conflict. Using a regression-discontinuity design, we analyze the impact of the world's largest public-works program, the Indian employment guarantee scheme NREGS, on conflict intensity. We argue that NREGS induces civilians to help the police, improving the police's effectiveness at tracking down insurgents, but making civilians vulnerable to retaliation by the rebels. Our empirical results are consistent with this hypothesis but inconsistent with a number of alternative explanations, and suggest that even programs with implementation problems can have important impacts on violence by promising development