Rebel Governance and Development: The Persistent Effects of Distrust in El Salvador

122 Pages Posted: 26 Sep 2022 Last revised: 28 Jan 2023

See all articles by Antonella Bandiera

Antonella Bandiera

Instituto Tecnológico Autónomo de México (ITAM)

Lelys Dinarte

World Bank

Juan Miguel Jimenez

University of Chicago

Sandra Rozo

World Bank

Maria Micaela Sviatschi

Princeton University

Date Written: September 2022

Abstract

How does rebel governance affect long-term development? Rebel forces have controlled territory and imposed their own institutions in many countries over the past decades affecting millions of people. We investigate the economic, social, and political consequences of temporary territorial control by guerrillas during the Salvadoran Civil War. During that time, guerrillas displaced state authorities and created their own informal institutions that encouraged autonomy and self-sufficiency from the state and external actors. Using a spatial regression discontinuity design, we show that areas once under guerrilla control have experienced worse economic outcomes over the last 20 years than adjacent areas controlled by the formal state. Our results suggest that reliance on non-state governance reinforced norms of distrust of external actors, producing overdependence on subsistence farming and disengagement from postwar governments. Results do not revert despite increased postwar public investment in formerly guerrilla areas. We argue that when non-state actors develop alternative governance institutions, these can prompt adverse development effects through lasting norms of distrust of out-groups.

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Suggested Citation

Bandiera, Antonella and Dinarte, Lelys and Jimenez, Juan Miguel and Rozo, Sandra and Sviatschi, Maria Micaela, Rebel Governance and Development: The Persistent Effects of Distrust in El Salvador (September 2022). NBER Working Paper No. w30488, Available at SSRN: https://ssrn.com/abstract=4229111 or http://dx.doi.org/10.2139/ssrn.4229111

Antonella Bandiera (Contact Author)

Instituto Tecnológico Autónomo de México (ITAM) ( email )

Av. Camino a Sta. Teresa 930
Col. Héroes de Padierna
Mexico City, D.F. 01000, Federal District 01080
Mexico

Lelys Dinarte

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Juan Miguel Jimenez

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Sandra Rozo

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Maria Micaela Sviatschi

Princeton University ( email )

22 Chambers Street
Princeton, NJ 08544-0708
United States

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