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The Risk of Civil Conflicts as a Determinant of Political Institutions

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  • Álvaro Aguirre

Abstract

This paper proposes a specific mechanism to explain differences in political institutions based on the asymmetric and uncertain costs of civil conflicts. Asymmetry implies that the net benefit of fighting an insurgency is not shared equally by members of the elite. But uncertainty implies that these benefits are more evenly distributed ex-ante. The members of the elite face a commitment problem: they would like to commit in advance to a strong response to insurgencies, but ex-post they have the incentives to block any response if the conflict mainly affects other members of the elite. One way of solving this is empowering the executive so he may react forcefully to conflicts, despite the opposition of some fraction of the elite. In the model this group has to decide on the constraints imposed on the executive. Fewer constraints lead to a higher risk of expropriation. But more constraints lead to a suboptimal response to conflicts. The main prediction is that, conditional on asymmetric and uncertain costs, the higher is the likelihood of a civil conflict in the future, the lower are the constraints imposed on the executive. The paper empirically validates this implication using two types of evidence. First, it uses a sample of former colonies that became independent after WWII and geographic variables to identify the exogenous component of the likelihood of civil conflicts at the moment of the independence. Second, the model is used to explain the political events in the Americas after independence. Countries less prone to internal conflicts were the ones that imposed more constraints on the executive during the second half of the nineteenth century.

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Bibliographic Info

Paper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 649.

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Date of creation: Dec 2011
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Handle: RePEc:chb:bcchwp:649

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  1. Markus Bruckner & Antonio Ciccone, 2010. "Rain and the Democratic Window of Opportunity," Working Papers 1010, BBVA Bank, Economic Research Department.
  2. Bates, Robert H. & Coatsworth, John H. & Williamson, Jeffrey G., 2007. "Lost Decades: Postindependence Performance in Latin America and Africa," The Journal of Economic History, Cambridge University Press, vol. 67(04), pages 917-943, December.
  3. North,Douglass C. & Wallis,John Joseph & Weingast,Barry R., 2009. "Violence and Social Orders," Cambridge Books, Cambridge University Press, number 9780521761734, April.
  4. Juan Pablo Medina & Alberto Naudon, 2011. "Labor Market Dyncamics in Chile: the Role of Terms of Trade Shocks," Working Papers Central Bank of Chile 637, Central Bank of Chile.
  5. Acemoglu, Daron & Robinson, James A, 1998. "Why did the West Extend the Franchise? Democracy, Inequality and Growth in Historical Perspective," CEPR Discussion Papers 1797, C.E.P.R. Discussion Papers.
  6. repec:cge:warwcg:05 is not listed on IDEAS
  7. Marcelo J. Moreira, 2003. "A Conditional Likelihood Ratio Test for Structural Models," Econometrica, Econometric Society, vol. 71(4), pages 1027-1048, 07.
  8. Debraj Ray, 2010. "Uneven Growth: A Framework for Research in Development Economics," Journal of Economic Perspectives, American Economic Association, vol. 24(3), pages 45-60, Summer.
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Cited by:
  1. Álvaro Aguirre, 2013. "Rebellions, Technical Change, and the Early Development of Political Institutions in Latin America," Working Papers Central Bank of Chile 688, Central Bank of Chile.

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