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Can civilian communities in conflict zones arbitrage their support for better services? A wide macro-historical literature (e.g., Tilly 1990; Scott 1985) characterizes political development as a competition for citizen loyalties that smooth the process of revenue collection. Micro-studies of hearts and minds initiatives (Berman, Felter, and Shapiro 2011) characterize counter-insurgency as a process of buying off civilians with stable, superior governance. Civilians in conflict zones would plainly prefer to barter their support to the highest combatant bidder, but selective threats and rewards from combatants tend to undermine the capacity of civilians to act collectively in pursuit of public goods (Popkin 1979; Kalyvas 2006). Yet across a range of conflict zones, combatants provide services and security to some communities over others.
This paper proposes a model in which the quality of local leadership influences the quality of services civilian communities receive from insurgents. Insurgents have limited resources to woo civilian communities, and naturally prefer to spend them where payoffs to the insurgency’s development are highest. Insurgent payoffs from public goods provision are undermined by secret civilian defection for selective incentives. Strong local, informal institutions develop civic capacity and fungible social capital the community can mobilize to manage collective action problems, even in the shadow of violence (Putnam 1993; Ostrom 1990; Fearon and Laitin 1996). Existing literature establishes that some communities use similar capacity to keep the conflict at arm’s length (Arjona 2016; Kaplan 2017). This paper argues that in some circumstances, communities with strong local leaders employ them to broker loyalty-for-services arrangements with combatants effectively inviting armed groups in for the promise of political reform that benefits the community. Combatants take up these offers where the value of civilian support outweighs the demand for services.
I provide evidence for this proposition in Nepal, where Maoist rebels agitated for political and economic rights for minority groups. In some villages, forestry conservation groups, which created and enforced complex rules for forest management and harvest, led to high levels of minority participation in local politics, and generated substantial social capital among a group marginalized elsewhere. Using data gathered police and insurgent archives, and from the UNHCR, I demonstrate that Maoist rebels dismantled state institutions and rebuilt their own service provision and governance capacity first and fastest in villages with where lower-caste minorities were politically well-organized in conservation groups. These findings suggest civilians can use conflict to re-negotiate social contracts, and invites more investigation into the circumstances under which such collective action occurs.