Research / BFI Working PaperApr 08, 2021

On the Ends of the State: Stationary Bandits and the Time Horizon in Eastern Congo

Soeren J. Henn, Christian Mastaki Mugaruka, Miguel Ortiz, Raul Sanchez de la Sierra, David Qihang Wu

We show that armed actors refrain from using their power to arbitrarily steal from an economy if, and only if, the armed actors’ property rights over stealing from that economy are secure. By 2009, armed actors taxed, administered, and protected various villages in Democratic Republic of the Congo. We exploit the timing and targeting of an international military operation that permanently made taxing these villages impossible. Following the operation, these armed actors turned to violently expropriating the same villages. The findings suggest that the security of property rights over stealing, hence the stealing horizon, can sustain, or destroy, economic growth.

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