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The internal control constraint on compliance

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Author Info
Emmanuel Athanassiou
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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Publisher Info
Article provided by Taylor and Francis Journals in its journal Defence and Peace Economics.

Volume (Year): 14 (2003)
Issue (Month): 6 (December)
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 listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Emmanuel Athanassiou & Christos Kollias, 2002. "Modeling The Effects Of Military Tension On Foreign Trade: Some Preliminary Empirical Findings From The Greek-Turkish Rivalry," Defence and Peace Economics, Taylor and Francis Journals, vol. 13(5), pages 417-427, January. [Downloadable!] (restricted)
  2. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February. [Downloadable!] (restricted)
  3. Riordan, Michael H. & Williamson, Oliver E., 1985. "Asset specificity and economic organization," International Journal of Industrial Organization, Elsevier, vol. 3(4), pages 365-378, December. [Downloadable!] (restricted)
  4. Anderton, Charles H & Anderton, Roxane A & Carter, John R, 1999. "Economic Activity in the Shadow of Conflict," Economic Inquiry, Oxford University Press, vol. 37(1), pages 166-79, January.
  5. Ricardo J. Caballero, 1997. "Aggregate Investment," NBER Working Papers 6264, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Baumol, William J, 1990. "Entrepreneurship: Productive, Unproductive, and Destructive," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 893-921, October. [Downloadable!] (restricted)
  7. McGuire, Martin C., 1995. "Defense economics and international security," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 2, pages 13-43 Elsevier. [Downloadable!] (restricted)
  8. Pindyck, Robert S., 1990. "Irreversibility, uncertainty, and investment," Working papers 3137-90., Massachusetts Institute of Technology (MIT), Sloan School of Management. [Downloadable!]
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  9. Ricardo J. Caballero & Eduardo M. R. A. Engel & John C. Haltiwanger, 1995. "Plant-Level Adjustment and Aggregate Investment Dynamics," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1995-2), pages 1-54. [Downloadable!]
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