Opium for the Masses? Conflict-Induced Narcotics Production in Afghanistan

We show that the recent rise in Afghan opium production is caused by violent conflicts. Violence destroys roads and irrigation, crucial to alternative crops, and weakens local incentives to rebuild infrastructure and enforce law and order. Exploiting a unique data set, we show that Western hostile casualties, our proxy for conflict, have strong impact on subsequent local opium production. This proxy is shown to be exogenous to opium. We exploit the discontinuity at the end of the planting season: Conflicts have strong effects before and no effect after planting, assuring causality. Effects are strongest where government law enforcement is weak.conflict, narcotics production, resource curse, Afghanistan

Lojalitet, tilfredshet og bytteintensjon i Norsk skadeforsikringsbransje

Skadeforsikringsbransjen er en bransje vi antar er preget av stor "turn-over". Kunder er ikke lengre like lojale til selskapene og jakter hyppigere enn før etter det billigste selskapet. Bakgrunnen for dette har med digitaliseringen å gjøre da det har blitt enklere for forbrukerne å sammenlikne priser fra de forskjellige selskapene. Dette studiet har som formål å kartlegge hvorvidt lojalitet og tilfredshet spiller inn på bytteintensjonen i bransjen Problemstillingen for denne oppgaven er om følger; “Er det en sammenheng mellom lojalitet, tilfredshet og bytteintensjon i norsk skadeforsikringsbransje?” Denne problemstillingen ble dannet med grunnlag i teori, artikler og tidligere forskning i form av en metaanalyse. Videre ble det dannet to hypoteser som skulle bekreftes eller avkreftes. Vi benyttet oss av en kvantitativ metode for å besvare denne problemstillingen. Med utgangspunkt i et utvalg av personer over 18 år i Norge, hentet vi inn data ved hjelp av spørreskjema. Funnene i undersøkelsen ga oss noen interessante funn. Det viste seg at hypotese 1; “Det er en negativ sammenheng mellom lojalitet og bytteintensjon” ikke fikk støtte for i denne undersøkelsen, noe som ikke stemte overens med det vi hadde sett for oss. Vi fikk derimot støtte for hypotese 2; “Det er en negativ sammenheng mellom tilfredshet og bytteintensjon”. Det viste seg i denne oppgaven at desto mer tilfreds kunder er, jo mindre er sannsynligheten for at de bytter, mens økt lojalitet fører til bytteintensjon. Vi ble derfor nødt til å forkaste hypotesen som omhandlet lojalitet og bytteintensjon

Debt and poppy cultivation : driving factors behind Afghan opium production

In this master thesis I intend to study opium production in Afghanistan, and identify important drivers behind the opium production. The main aim is to test whether or not Afghan opium production is debt-induced. A claim often found in the literature on Afghan opium production is that the production of opium is debt–induced. In the first part of the thesis I provide a theoretical rationale for why this is the case, using a dynamic model of the cropping choice of a utility maximizing household. The main finding is that optimal effort devoted to opium production is increasing in the level of debt. In the second part of the thesis I describe the data set, and put up correlation tables for opium production and debt. The findings are consistent with the literature — the conditional probability of producing opium given debt is significantly higher than the conditional probability of producing opium given non-negative wealth. But correlation does not necessarily imply causation. In the third part of the thesis I therefore estimate reduced form versions of the theoretical model, calculating the choice probabilities for different cropping strategies. Here the findings diverge from the literature — when controlling for price incentives, eradication risk, social class, and regional-specific fixed effects, the conditional probability of producing opium is independent of debt. To explain this finding I, in the final part the thesis, show that heterogeneity in moral costs may create two subpopulations of opium farmers. The first, the “opportunists”, produce opium for the unrivalled profit, while the second, the “moralists”, produce opium out of necessity. Utilizing the theoretical model with moral costs, I find that the “moralists” either will produce opium at maximum capacity or not at all, while the “opportunists” will have a production level somewhere in between. Taking this into account when calculating choice probabilities, our model fits the data better: for the “moralists” debt is an important determinant of opium production, while for the “opportunists” debt is unimportant

The Scandinavian model-An interpretation

The small open economies in Scandinavia have for long periods had high work effort, small wage differentials, high productivity, and a generous welfare state. To understand how this might be an economic and political equilibrium we combine models of collective wage bargaining, creative job destruction, and welfare spending. The two-tier system of wage bargaining provides microeconomic efficiency and wage compression. Combined with a vintage approach to the process of creative destruction we show how wage compression fuels investments, enhances average productivity and increases the mean wage by allocating more of the work force to the most modern activities. Finally, we show how the political support of welfare spending is fueled by both a higher mean wage and a lower wage dispersion.acceptedVersio

Replication data for: Opium for the Masses? Conflict-Induced Narcotics Production in Afghanistan

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Opium for the Masses? Conflict-induced Narcotics Production in Afghanistan

We show that the recent rise in Afghan opium production is caused by violent conflicts. Violence destroys roads and irrigation, crucial to alternative crops, and weakens local incentives to rebuild infrastructure and enforce law and order. Exploiting a unique data set, we show that Western hostile casualties, our proxy for conflict, have strong impact on subsequent local opium production. This proxy is shown to be exogenous to opium. We exploit the discontinuity at the end of the planting season: Conflicts have strong effects before and no effect after planting, assuring causality. Effects are strongest where government law enforcement is weak.Conflict; narcotics production; resource curse; Afghanistan