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Researchers of counterinsurgency, civil conflict, and statebuilding commonly assume that a Weberian "monopoly on violence" is desirable. We know from other settings, however, that monopolies lead to extractive behavior. If monopolists are predatory, why are third-party statebuilders so eager to eliminate coercive challengers to government control? We argue that this habit stems from a misreading of government capacity in successful states. Although stable governments sometimes appear to hold a monopoly on force, their behavior is in fact constrained by latent coercive competitors who emerge only when monopolists overstep. For example, overly extractive government policies often provoke the rise of insurgents, while negligent governments create vacuums that political entrepreneurs quickly fill. We offer a parsimonious formalization of this dynamic which yields several important implications. First, although civil conflict is costly in both human and economic terms, we show that the latent threat of insurgency can be economically productive and conducive to good governance. Second, external parties who are sympathetic to the plight of civilians living under abusive rule should help insurgents secure political and economic concessions but should refrain from directly abetting revolution, as post-revolution monopolists are apt to impose a new series of extractive policies. Finally, we show that the risk of civil violence can actually decline as insurgent movements become more institutionalized because governments who are better informed about the credibility and capabilities of their opponents are also better able to identify and implement peaceful settlements.