Mike Munger, political science professor at The School Which Will Not Be Named, recently points to a new NBER working paper [pdf] by Berman, Shapiro, and Feiter that claims that while money may not buy love, it still has other uses. Abstract:
Rebuilding social and economic order in conflict and post-conflict areas will be critical for the United States and allied governments for the foreseeable future. Little empirical research has evaluated where, when, and how improving material conditions in conflict zones enhances social and economic order. We address this lacuna, developing and testing a theory of insurgency. Following the informal literature and US military doctrine, we model insurgency as a three-way contest between rebels seeking political change through violence, a government seeking to minimize violence through some combination of service provision and hard counterinsurgency, and civilians deciding whether to share information about insurgents with government forces. We test the model using new data from the Iraq war. We combine a geo-spatial indicator of violence against Coalition and Iraqi forces (SIGACTs), reconstruction spending, and community characteristics including measures of social cohesion, sectarian status, socio-economic grievances, and natural resource endowments. Our results support the theory's predictions: counterinsurgents are most generous with government services in locations where they expect violence; improved service provision has reduced insurgent violence since the summer of 2007; and the violence-reducing effect of service provision varies predictably across communities.
It's not entirely clear that the relationship is causal, and as Blattman notes the sample is fairly small and focuses on one of the best-run programs in Iraq, but this is still encouraging news. It has long been alleged that one of the reasons why extremist groups like Hamas and Hezbollah retain such followings is that they do a very good job of providing services to local populaces. If the U.S. or other governments can compete, then perhaps we can do better with butter than with guns.