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On the Micro-Foundations of Contract versus Conflict with Implications for International Peace-Making

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  • José Cuesta
  • Syed Mansoob Murshed

Abstract

This paper expands the micro-foundations of the traditional greed and grievance non-cooperative model of civil conflict between a government and a rebel group. First, the paper’s model allows for greed and grievance to be orthogonal, so that they may affect each other. Second, the model allows for the reaction curves of both parties in non-cooperative games to be substitutes and not inevitably complementary. Third, the paper allows for Diaspora transfers to rebel groups. Fourth, the paper expands external aid in the form of fungible financing of government transfers “buying” peace. These extensions provide a better understanding of conflict persistence, the consequences of competing international aid and why sub-optimal sanctions provision (“cheap talk”) by the international community are frequent.

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Paper provided by Inter-American Development Bank, Research Department in its series Research Department Publications with number 4591.

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Date of creation: Aug 2008
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Handle: RePEc:idb:wpaper:4591

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  1. Patricia Justino, 2006. "On the Links between Violent Conflict and Chronic Poverty: How Much Do We Really Know?," HiCN Working Papers 18, Households in Conflict Network.
  2. repec:fth:oxesaf:2001-3 is not listed on IDEAS
  3. Collier, Paul & Hoeffler, Anke, 1998. "On Economic Causes of Civil War," Oxford Economic Papers, Oxford University Press, vol. 50(4), pages 563-73, October.
  4. Addison, Tony & Murshed, S. Mansoob, 2001. "From Conflict to Reconstruction: Reviving the Social Contract," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  5. Collier, Paul & Hoeffler, Anke, 2000. "Greed and grievance in civil war," Policy Research Working Paper Series 2355, The World Bank.
  6. Addison, Tony & Le Billon, Philippe & Murshed, S. Mansoob, 2001. "Conflict In Africa: The Cost of Peaceful Behaviour," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  7. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
  8. Azam, Jean-Paul & Mesnard, Alice, 2001. "Civil War and the Social Contract," IDEI Working Papers 124, Institut d'Économie Industrielle (IDEI), Toulouse.
  9. Roubini, Nouriel & Swagel, Phillip & Ozler, Sule & Alesina, Alberto, 1996. "Political Instability and Economic Growth," Scholarly Articles 4553024, Harvard University Department of Economics.
  10. Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-21, September.
  11. Frances Stewart, 2000. "Crisis Prevention: Tackling Horizontal Inequalities," Oxford Development Studies, Taylor & Francis Journals, vol. 28(3), pages 245-262.
  12. Jean-Paul Azam, 2001. "The redistributive state and conflicts in Africa," CSAE Working Paper Series 2001-03, Centre for the Study of African Economies, University of Oxford.
  13. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
  14. Alesina, Alberto, et al, 1996. " Political Instability and Economic Growth," Journal of Economic Growth, Springer, vol. 1(2), pages 189-211, June.
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