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

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Author Info
José Cuesta
Syed Mansoob Murshed

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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 RES Working Papers 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. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February. [Downloadable!] (restricted)
  2. 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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  3. Murshed, S. Mansoob & Verwimp, Philip, 2008. "Enforcing Peace Agreements through Commitment Technologies," Working Papers RP2008/45, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  4. 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.
  5. Addison, Tony & Murshed, S. Mansoob, 2001. "From Conflict to Reconstruction: Reviving the Social Contract," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  6. Collier, Paul & Hoeffler, Anke, 1998. "On Economic Causes of Civil War," Oxford Economic Papers, Oxford University Press, vol. 50(4), pages 563-73, October.
  7. Azam, Jean-Paul & Mesnard, Alice, 2001. "Civil War and the Social Contract," IDEI Working Papers 124, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  8. 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. [Downloadable!]
  9. Tony Addison & Philippe Le Billon & S. Mansoob Murshed, 2002. "Conflict in Africa: The Cost of Peaceful Behaviour," Journal of African Economies, Oxford University Press, vol. 11(3), pages 365-386, September.
  10. Azam, J.P., 2001. "The Redistributive State and Conflicts in Africa," Working Papers Series 2001-3, Centre for the Study of African Economies, University of Oxford.
  11. Frances Stewart, 2000. "Crisis Prevention: Tackling Horizontal Inequalities," Oxford Development Studies, Taylor and Francis Journals, vol. 28(3), pages 245-262. [Downloadable!] (restricted)
  12. Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-21, September. [Downloadable!] (restricted)
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