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Aggressive elites and vulnerable entrepreneurs - trust and cooperation in the shadow of conflict

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Author Info

  • Mehlum, Halvor

    ()
    (Dept. of Economics, University of Oslo)

  • Ove Moene, Karl

    ()
    (Dept. of Economics, University of Oslo)

Abstract

We explore the implications of having a divided society where group leaders have motives for aggression towards other groups but where entrepreneurs have a desire for cooperation and peace. We assert that it is members of the elites who start conflicts and wage wars while the entrepreneurs undertake the type of economic activities that they find most profitable given the circumstances. We derive implications for peace and conflict. We find conflict induced poverty traps with self-fulfilling expectations about conflict and we derive implications for peace building strategies.

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File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2010/Memo-16-2010.pdf
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Bibliographic Info

Paper provided by Oslo University, Department of Economics in its series Memorandum with number 16/2010.

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Length: 37 pages
Date of creation: 03 Jan 2011
Date of revision:
Handle: RePEc:hhs:osloec:2010_016

Contact details of provider:
Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
Email:
Web page: http://www.oekonomi.uio.no/indexe.html
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Related research

Keywords: Conflict; investments; trust; cooperation;

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References

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  1. Dani Rodrik, 1989. "Policy Uncertainty and Private Investment in Developing Countries," NBER Working Papers 2999, National Bureau of Economic Research, Inc.
  2. Ozler, Sule & Rodrik, Dani, 1992. "External shocks, politics and private investment : Some theory and empirical evidence," Journal of Development Economics, Elsevier, vol. 39(1), pages 141-162, July.
  3. Skaperdas, S. & Syropoulos, C., 2000. "Guns, Butter, and Openness: On The Relationship Between Security and Trade," Papers 00-01-23, California Irvine - School of Social Sciences.
  4. Halvor Mehlum & Karl Moene, 2002. "Battlefields and marketplaces," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(6), pages 485-496.
  5. Michelle R. Garfinkel & Stergios Skaperdas & Constantinos Syropoulos, 2009. "International Trade and Transnational Insecurity: How Comparative Advantage and Power are Jointly Determined," Working Papers 080921, University of California-Irvine, Department of Economics.
  6. Azam, Jean-Paul & Mesnard, Alice, 2003. " Civil War and the Social Contract," Public Choice, Springer, vol. 115(3-4), pages 455-75, June.
  7. James E. Anderson & Douglas Marcouiller, S.J., 1999. "Insecurity and the Pattern of Trade: An Empirical Investigation," Boston College Working Papers in Economics 418, Boston College Department of Economics, revised 03 Aug 2000.
  8. Torvik, Ragnar, 2002. "Natural resources, rent seeking and welfare," Journal of Development Economics, Elsevier, vol. 67(2), pages 455-470, April.
  9. Chung, Tai-Yeong, 1995. "On Strategic Commitment: Contracting versus Investment," American Economic Review, American Economic Association, vol. 85(2), pages 437-41, May.
  10. Philippe Martin & Thierry Mayer & Mathias Thoenig, 2008. "Make Trade Not War?," Review of Economic Studies, Oxford University Press, vol. 75(3), pages 865-900.
  11. Stergios Skaperdas & Constantinos Syropoulos, 2002. "Insecure Property and the Efficiency of Exchange," Economic Journal, Royal Economic Society, vol. 112(476), pages 133-146, January.
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