As part of its counter-insurgency strategy in the volatile North Caucasus region, the Russian government has stressed economic development and invested considerable resources into the region. Prime Minister Vladimir Putin himself has noted that a lack of gainful employment (nesostoyatel’nost) has increased the pool of young people in the North Caucasus willing to join the predominantly jihadist insurgency. In mid-2010, Putin promised that Russia’s government would underwrite economic investment in the North Caucasus to increase gross regional product by 10 percent every year. In early 2011, Putin announced plans to invest 400 billion rubles ($13.4 billion) in 37 major new projects in energy, construction, and tourism aimed at creating 400,000 jobs over the next decade.
These plans continue the existing strategy. The Russian government allocated approximately $30 billion to the North Caucasus from 2000 to 2010—a non-trivial amount for a population of about 9 million people. Federal funding has increased tenfold from about $0.6 billion at the start of 2000 to $6 billion at the start of 2010. By 2010, Russian federal subsidies reached over $1,000 per capita in the North Caucasus ethnic republics—about six times more than Russia’s average. Most of it came in the form of grants to local governments. Hospitals, roads, schools, housing complexes, airports, and recreational facilities have been built anew or repaired. Unemployment, while still the highest in Russia, has been reduced. In Grozny—devastated in the major military operations of the 1990s and early 2000s—new high-rise residential complexes sprang up, main avenues were repaved, trees were planted, Internet cafes appeared, marble fountains sprouted, a refurbished airport opened, and Europe’s largest mosque rose in the city center.
And yet, a decade after two wars over Chechnya’s independence, a significant violent insurgency in the region has persisted. Attacks on Russian government forces and civilians and counter-insurgency operations have continued at a rate common to low-level civil wars. Systemic violence has spread from Chechnya and Ingushetia to Dagestan and Kabardino-Balkaria (KBR). From mid-2008 though mid-2010, violence in these four republics claimed approximately 1,500 people.
To what extent and under what conditions does economic development aid help mitigate insurgency-related violence, particularly of the kind galvanized predominantly by militant Islamists? Is it also possible that under certain conditions federal funding for economic projects might contribute to more violence? [...]