Role of Economic Development and Governance in Mitigating Insurgency: A Case Study of Tripura, India

The purpose of this paper is two folds: firstly, to analyze the short run and long run relationship between insurgency on the one hand and economic development and governance on the other and secondly, to determine the direction of causality between these three variables in Tripura, one of the conflict-ridden states in India during 1980-2005. With the application of auto-regressive distributed lag model (ARDL), an inverse relationship has been established which formalises the descriptive notions about the cointegration between insurgency on the one hand and economic development and governance on the other in the long run. No short run relationship was established between them. Going one step ahead, an endeavour has been made to capture both the economic development and governance as diagnostics for peace in our model. The study suggests that economic development brings down insurgency faster than that of governance. However, improvement in governance is more certain to scale down insurgency. Furthermore, the application of Granger Causality test suggests that there exists bidirectional causality between insurgency, economic development and governance taking 6 lag and onwards.