Essays On The Political Economy Of Development

Jonah Matthew Rexer, University of Pennsylvania


Violent political conflict is inimical to economic development and long-run prosperity. In this dissertation, I study the economic and political incentives underlying persistent violence in fragile states, with a focus on the interactions between firms, governments, and armed groups in both legal and illicit markets. This work centers on Nigeria, the largest country in Africa and one that exhibits many of the political, economic, and institutional challenges that are characteristic of weak states at low levels of development. This thesis analyzes two ongoing conflicts in Nigeria -- the Boko Haram Islamist insurgency, and the Niger Delta oil conflict -- to identify their causes and consequences. Methodologically, I combine applied economic theory that spans numerous fields and reduced-form empirical strategies with novel measurements of corruption, illicit activity, and armed group behavior. To this I add detailed government administrative data on extractive industries and newswire-based conflict event data in order to generate a rich empirical picture of the economic and political forces driving instability and violence in Nigeria. I find that violent conflict in Nigeria responds to standard economic incentives, follows the simple logic of opportunity costs and bargaining. The lessons from the Nigerian experience may be of use to many countries struggling to emerge from the mire of intractable violence and to provide their citizens with a more hopeful future.