Not So Sweet: External Price Shocks, State Capacity, and Violence in Madagascar's Vanilla Industry
Under what conditions do positive price shocks facilitate cycles of crime and violence? While extant literature posits that positive shocks in licit industries will decrease crime and violence, evidence for this outcome is often taken from contexts with at least nominal levels of state capacity. I challenge these expectations using evidence from Madagascar, which is characterized by extremely low state capacity, and the rapid increase in vanilla prices following an abrupt shift away from synthetic vanilla by several multinational companies.