Why is civil conflict so costly for development? We argue that civil conflict undermines the legitimacy
of the nation-state and empowers traditional sources of authority. In particular, we demonstrate, using
recent instances of an insurgency in West Africa, that civil conflict erodes national identities, replacing
them by ethnic identities. Based on the existing historical, anthropological, and ethnographic evidence,
we model the choice of loyalty (national or ethnic) as a coordination game with strategic complementarities
(“global game”). This model allows us to show how the instances of civil conflict can break
up that coordination and impede nation-building. We perform several estimation strategies (including
difference-in-difference and instrumental variables) to quantify the effect of civil conflict of national identity
in three nations: Burkina Faso, Mali, and Nigeria. The identification of the effect comes from using
pre-independence data on the location of ethnic homelands of rebellious groups of Tuareg (in case of
Burkina Faso and Mali) and Hausa/Fulani (in case of Nigeria). Our key assumption is that the location
of those groups in colonial times is independent of the “potential outcome”: potential changes in national
identity between years 2010 and 2012. We explore the plausibility of this assumption using pre-treatment
trends, placebo tests, and robustness checks. We also find that our estimates are resilient to the violation
of exclusion restrictions (even the violation is large as our most important individual-level predictor of
national identity does not revert our findings). Our theory and evidence contribute to the study of state
formation and state capacity by exploring the roots of people’s self-identification with a state.