Centre for Development Economics
and
Department of Economics, Delhi School of Economics

ANNOUNCE A SEMINAR

The Economic Costs of
Naxalite Violence and the Economic Benefits of a
Unique Robust Security Response

by

Saurabh Singhal
University of Southern California

On Thursday, August 12, 2010 at 3:00 p.m.

Venue : New Seminar Room [First Floor]
Department of Economics, Delhi School of Economics

All are cordially invited

Abstract

Using the synthetic control method of analysis, we provide the first measurements of the economic costs of Naxalite violence in India, as well as the direct economic benefits of a unique robust security response in one of the Naxalite affected states. Compared to a synthetic control region constructed from states not affected by Naxalite violence, we find that states affected by Naxalite violence lost on average 11.49% of their per capita NSDP over the period 1981 to 2000. Of the states affected by Naxalite violence, only one state i.e. Andhra Pradesh raised a specially trained and equipped police force in 1989 known as the Greyhounds, dedicated to combating the Naxalite menace. Compared to a synthetic control region constructed from states affected by Naxalite violence that did not raise a specially trained anti-Naxalite police force, we find that Andhra Pradesh gained on average 17.13% of its per capita NSDP over the period 1990-2000. Placebo tests indicate that both results are significant.