Econometric evidence against Dodd-Frank as applied in the DRC

This study is the first to provide econometric evidence of the relationship between conflict and mineral endowments in the DRC. While there are vivid debates and speculations around the motives of armed groups, I find that price shocks lead to armed groups violence, between groups and in order to acquire territory hosting the mineral (not to more pillages). This result is in line with other reports based on qualitative data, such UN (2002). Second, I find that interventions aimed at constraining armed groups ability to collect taxes increase violence against civilians in the short-run. Interventions that attempt to weaken armed groups finances have become dominant among policy circles. In particular, the United States issued the Dodd-Frank legislation in 2012, aimed at constraining purchases of minerals whose trade is a source of finance to armed groups. Governments interested in “cleaning” the mineral chain, thus, may need to protect civilians in the aftermath of these interventions, and provide alternative occupations to combatants who lose access to revenues from taxes as a result of these interventions. 

That is Columbia’s Raul Sanchez de la Sierra in a neat paper on the origins of states. Check it out here (H/T Chris Blattman)

For more on this subject see this over at HuffPost.

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