War Risk and Subnational Foreign Direct Investment

with Manuel Oechslin
SSRN Working Paper

When war risk rises, does it affect where firms invest within countries? We link military geography to FDI, arguing that rising war risk changes the attractiveness of investment locations unevenly within countries. We examine this by exploiting Russia's 2022 invasion of Ukraine as a shock to the risk of a Russia-NATO confrontation along NATO’s eastern flank. Using georeferenced FDI data in a difference-in-differences design with continuous treatment intensity, we show that locations that are one standard deviation closer to Russia experienced a 2.6 percentage point larger decline in FDI. The pattern is not explained by active fighting or Western sanctions.

The Aftermath of War:
Conflict Exposure and Subnational Recovery

Single Authored
Working Paper

How does past exposure to fighting shape a district’s economic trajectory after war? This paper studies heterogeneous post-conflict recovery using a panel of more than 5,400 African districts from 1996 to 2020. It introduces a country-level classification of post-conflict periods and a district-level measure of the intensity and timing of wartime exposure based on UCDP conflict events. Using harmonized nighttime lights as a measure of local economic activity, I show that a national peace dividend and local war scarring can coexist within the same country: districts without locally recorded fighting grow faster than districts in peaceful countries, while directly exposed districts face an additional recovery penalty. I then use geocoded World Bank disbursements to examine whether the association between aid and subsequent local growth varies across these recovery environments. The aid-growth association differs across wartime-exposure groups and post-conflict conditions, including the durability of peace. National post-conflict status therefore masks differences in both local recovery and the outcomes associated with spatially targeted development assistance.

Consolidating Power in Fragile States: Evidence from Afghanistan’s Poppy Ban

with Sydney A. Gordon
Work in Progress

In April 2022, the Taliban banned opium poppy cultivation in Afghanistan, causing an estimated 95 percent decline in cultivation between the 2022 and 2023 harvests. Before the ban, Afghanistan supplied over 90 percent of the world’s opium and the opium economy accounted for 9 to 14 percent of national GDP. We use this policy shock to study how resource exhaustion reshapes conflict and political control in a fragile state. We develop a conceptual framework that adapts standard resource-conflict theories to resource exhaustion and distinguishes between actors engaged in productive and appropriative activity. Using a district-month panel and a difference-in-differences design with continuous treatment intensity based on pre-ban cultivation, we find sharply heterogeneous responses. Poppy-growing districts experienced more protests and riots, consistent with economic grievance, but no significant increase in organized armed violence. By contrast, districts with pre-existing anti-Taliban resistance activity, which had little direct exposure to cultivation, experienced substantial declines in organized violence. These findings are consistent with resource exhaustion generating economic grievance in directly exposed areas while weakening organized resistance elsewhere, facilitating the Taliban’s consolidation of power.

UNDP Report - Nighttime Lights Analysis of the Economic Consequences of the 2023 Sudan Conflict

with Giorgia Giovannetti and Tommaso Pacetti
Policy Work