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Trade openness and the settlement of domestic disputes in the shadow of the future

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  • Garfinkel, Michelle R.
  • Syropoulos, Constantinos

Abstract

We explore the severity of an ongoing dispute over a productive resource within a country that participates in world trade. In addition to arming, the contending groups in our setting choose either to engage in destructive conflict or to settle their dispute peacefully. Our central objective is to characterize the conditions under which the dispute might be resolved peacefully instead of violently. The analysis underscores the intuitive roles played by the destructiveness of open conflict and the salience of the future that have been identified in the previous literature, but it also provides some novel insights into how world prices and trade openness matter. Among other things, we find that, given conflict׳s destructive effects and time preferences, settlement is most likely to be supported as a stable equilibrium when the “traditional” gains from trade are largest. However, there also exist circumstances under which increased trade openness can induce destructive conflict.

Suggested Citation

  • Garfinkel, Michelle R. & Syropoulos, Constantinos, 2015. "Trade openness and the settlement of domestic disputes in the shadow of the future," Research in Economics, Elsevier, vol. 69(2), pages 191-213.
    • Handle: RePEc:eee:reecon:v:69:y:2015:i:2:p:191-213
    DOI: 10.1016/j.rie.2015.02.005
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    1. Michelle R. Garfinkel & Michael McBride & Stergios Skaperdas, 2012. "Governance and Norms as Determinants of Arming," Revue d'économie politique, Dalloz, vol. 122(2), pages 197-212.
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    Cited by:

    1. Atallah, Samer, 2017. "Price shocks and political conflict," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 7(2), pages 65-80.
    2. Syropoulos, Constantinos & Zylkin, Thomas, 2015. "The Problem of Peace: A Story of Corruption, Destruction, and Rebellion," School of Economics Working Paper Series 2015-5, LeBow College of Business, Drexel University.

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    More about this item

    Keywords

    Trade openness; Domestic disputes; Resource insecurity; Peaceful settlement; Open conflict; Shadow of the future;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F10 - International Economics - - Trade - - - General
    • F60 - International Economics - - Economic Impacts of Globalization - - - General

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