Foreign Subversion and State-building: Evidence from China
Foreign subversion -- the act of undermining territorial control of a target state through third party proxy group -- has been found to complicate state-building in peripheral regions. I argue that foreign subversion can facilitate state-building when the regime leadership has a strong capacity to control its co-ethnic population. Specifically, the regime can resettle co-ethnic migrants to border regions to operate like local militia, which can forestall insurgency by the peripheral ethnic group supported by hostile foreign power. The capacity to control the migrants will allow the state to restrain the migrants from competing for land and resources with the locals while providing security to the noncombatant civilians by making targeted attacks on the active insurgents. I test the effect of foreign subversion on state-building in China's peripheral provinces. I exploit a drought in Xinjiang in 1962 as an exogenous shock which provided the Soviet Union with an unique opportunity to exploit an aggrieved Muslim population. Using an original panel dataset and a difference-in-differences design, I show that the threat of Soviet subversion led to disproportionate greater increase in ethnic Han migrants who served as local militia to Xinjiang than other border localities of China. This paper suggests that foreign subversion need not be a "curse" for state-building when the regime leadership has a strong capacity to control its co-ethnic population.