Does violent conflict affect the distribution of social welfare? Evidence from India's Mahatma Gandhi National Rural Employment Guarantee Act

What are the contentious political dynamics of the largest workfare program in the world, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) of India? Combining quantitative analysis with a close reading of government documents and a survey of the existing literature, we suggest that the Indian government's counter-insurgency strategy against the Maoist unrest is a significant dynamic shaping the distribution of MGNREGA benefits. In our empirical analysis, we examine the effect of Maoist incidents on household income due to MGNREGA by merging a nationally representative household survey (Indian Human Development Survey-II) and a Maoist incidents dataset. Controlling for relevant household and district characteristics, we show that higher intensity of violent conflicts is associated with higher MGNREGA benefits. This result is robust to using a variety of alternative specifications and estimation methodologies.