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The internal control constraint on compliance

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  • Emmanuel Athanassiou
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    Abstract

    Compliance to non-violent norms of collective behaviour may be contingent on the internal political stability of a state. If external developments give rise to economic incentives for agents to change their allegiance, increasing international tension may be a strategy employed in order to produce counter-incentives. A model based on the theory of investment under uncertainty is developed to examine this issue. Increases in tension will offset incentives created by growth opportunities to switch employment and hence political allegiance. The proportion of incentive rewards as compared to position-specific rents in an economy turns out to be crucial to the behaviour of the model. The model allows various policy options, such as embargoes to be analysed.

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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Defence and Peace Economics.

    Volume (Year): 14 (2003)
    Issue (Month): 6 ()
    Pages: 413-424

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    Handle: RePEc:taf:defpea:v:14:y:2003:i:6:p:413-424

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    Related research

    Keywords: Investment Uncertainty; Compliance;

    References

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    1. Cabalero, R.J., 1997. "Aggregaete Investment," Working papers 97-20, Massachusetts Institute of Technology (MIT), Department of Economics.
    2. Anderton, Charles H & Anderton, Roxane A & Carter, John R, 1999. "Economic Activity in the Shadow of Conflict," Economic Inquiry, Western Economic Association International, vol. 37(1), pages 166-79, January.
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    6. Pindyck, Robert S., 1990. "Irreversibility, uncertainty, and investment," Working papers 3137-90., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    7. Charles H. Anderton & John R. Carter, 2001. "The Impact of War on Trade: An Interrupted Times-Series Study," Journal of Peace Research, Peace Research Institute Oslo, vol. 38(4), pages 445-457, July.
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