Quid pro quo: How the wartime economy shapes violent contestation of the state after war

Why do some conflict-affected areas remain an arena of violent contestation of the state, while others transition to peace? I suggest that economic networks developed during intrastate conflict-i.e. wartime economies-give rise to continued pockets of insecurity. The significance of the wartime economy for local livelihoods sustains an interdependence between rebels and communities that permits rebels to remain locally embedded as they protect resource extraction and trade. It also creates the perception that state expansion could threaten collective survival, raising costs of effective counterinsurgency. Drawing on novel subnational data on Peru, an instrumental variables approach, and interviews with community members, government officials, and experts, I demonstrate that areas linked to the wartime economy see more violent attacks after conflict termination as a function of how the civic perception of governance actors has developed in the area. The findings underscore the limitations of coercive state capacity and the centrality of civilians in shaping governance.