Cash and Conflict: Large-Scale Experimental Evidence from Niger

Abstract

Conflict undermines development, while adverse economic shocks, in turn, can increase conflict risk. Policy interventions such as cash transfers could attenuate conflict risk by raising poor households’ opportunity costs. However, cash transfers may also trigger looting, and expanding government programs may attract attacks to undermine state legitimacy. We study the net effect across these forces based on the large-scale randomization of a government-led cash transfer program and georeferenced conflict events. Cash transfers did not yield greater pacification but—if anything—triggered a short-term increase in conflict events (by 0.63 percentage points), substantially driven by terrorist attacks by foreign rebel groups. (JEL D72, D74, H53, I38, O15, O17)