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On the micro-foundations of contract versus conflict with implications for international peace-making

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  • Jose Cuesta
  • Syed Mansoob Murshed

Abstract

This paper expands the micro-foundations of the traditional greed and grievance non-cooperative model of civil conflict. First, we allow for greed and grievance to be orthogonal, so that they may affect each other rather than being exogenous. Second, we allow for the reaction curves of both parties in non-cooperative games to be substitutes and not inevitably complementary, so a peaceful strategy from a group may be followed by a belligerent upsurge from the other. Third, we also allow for Diaspora transfers to rebel groups, thus generating a trade-off between the gains associated with peace and war among rebels. Fourth, we expand external aid in the form of fungible financing of government transfers 'buying' peace by allowing for mechanisms that induce behavioural change towards peace. These extensions provide a better understanding of conflict persistence, the consequences of competing international aid and sub-optimal sanctions provision ("cheap talk") by the international community.

Suggested Citation

  • Jose Cuesta & Syed Mansoob Murshed, 2012. "On the micro-foundations of contract versus conflict with implications for international peace-making," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 2(2), pages 1250009-125.
  • Handle: RePEc:gok:ijdcv1:v:2:y:2012:i:2:p:1250009
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    File URL: http://www.worldscientific.com/doi/abs/10.1142/S2010269012500093
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    References listed on IDEAS

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    1. Jean-Paul Azam, 2001. "The Redistributive State and Conflicts in Africa," Journal of Peace Research, Peace Research Institute Oslo, vol. 38(4), pages 429-444, July.
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    4. Addison, Tony & Murshed, S. Mansoob, 2001. "From Conflict to Reconstruction: Reviving the Social Contract," WIDER Working Paper Series 048, World Institute for Development Economic Research (UNU-WIDER).
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    6. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
    7. Tony Addison & Philippe Le Billon & S. Mansoob Murshed, 2002. "Conflict in Africa: The Cost of Peaceful Behaviour," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 11(3), pages 365-386, September.
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    1. repec:gok:ijdcv1:v:7:y:2017:i:1:p:12-31 is not listed on IDEAS

    More about this item

    Keywords

    Civil war; social contract; aid for peace;

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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