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This chapter focuses on the Maoist insurgency in the 75 districts of Nepal and tries to analyze the insurgency in a comparative perspective. We compare the 75 districts with the aim to address the following questions: Why does an insurgency emerge in certain areas? How is it linked to economic, social, or political factors? Why does an insurgency show a robust presence in some districts but fail to do likewise in others? We attempt to answer these questions by conducting multivariate regressions using longitudinal data to test our primary hypothesis that the onset of an insurgency and the continuation are functions of the same factors. We examine insurgency within one country, Nepal, and test our model in Nepal's 75 districts, in a single country context, using available data on the 10-year-long insurgency. We break down the Nepalese insurgency into two parts: the onset and the continuation. Our findings indicate that regions predominantly polarized by caste are more prone to the onset of insurgency than any other factor. Higher literacy rate, a proxy for government efficacy, renders insurgency less feasible, and difficult terrain has no impact whatsoever. However, after the onset, many of the explanatory variables are no longer significant for the continuation of the insurgency and grievances alone tend to be meaningless.

Raul Caruso, educated in Naples, Leuven and Milan, is currently senior researcher at the Institute of Economic Policy, Università Cattolica del Sacro Cuore (Italy) where he is also serving as adjunct professor of international economics. He is also visiting professor at Warsaw University (Poland). He has also been visiting professor at Massachusetts Institute of Technology (MIT) (USA), Hiroshima University (Japan), Kazakh Humanitarian Law University (Kazakhstan) and Novosibirsk State University (Russian Federation). His main research interests are peace economics, international political economy, economics of crime and sport economics. He has published on contest theory, sport economics, economic interpretation of terrorism, economic causes of wars and international economic sanctions. He is the executive coordinator of Network of European Peace Scientists (NEPS). He is also editor in chief of Peace Economics, Peace Science and Public Policy.

The study of war and peace is nowadays becoming a complex topic drawing from different disciplines and applying different methodologies. This book collects 10 studies on conflict and its pernicious consequences. The appropriate scientific field for this set of studies is the peace economics as defined in Isard (1994), Arrow (1995) and Caruso (2010). In particular, Peace Economics is a sub-field of Peace Science and it is generally concerned with (1) the economic determinants of actual and potential conflicts; (2) the impact of conflict on welfare and on the economic behaviour of societies; (3) the use of economic measures to cope with and control conflicts whether economic or not. Central to this field are analyses of conflicts amongst nations, regions and other communities of the world; measures to control (deescalate) arms races and achieve reduction in military expenditures; programmes and policies to utilize resources thus released for more constructive purposes. Put briefly, the main object of peace economics is the study of conflict and conflict resolution in different forms. In particular, the contents of this book are mainly on the positive ‘side’ of Peace Economics, which emphasizes the study of conflict and its consequences. In particular, in the recent years, a growing economic literature has uncovered both the economic determinants and consequences of actual intra-state conflicts. This book is intended to be a contribution to this literature. It gathers both theoretical and empirical contributions.