Plausibly Exogenous [839] - Illegal Payments (05/06/2022)
LHS Variable
Level of illegal payments
RHS Variable
Market structure
Source of Exogenous Variation
During the period we study, the Indonesian government withdrew over 30,000 police and military from Aceh province in accordance with a peace agreement signed earlier in the year to end a 30‐year civil war between separatists and the Indonesian government. Since the troops and police that were withdrawn manned many of the checkpoints that extracted payments from truck drivers, this withdrawal represents a plausibly exogenous change in the market structure for illegal payments
- Olken and Barron (2009), “The Simple Economics of Extortion: Evidence from Trucking in Aceh”