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

Author

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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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    Cited by:

    1. is not listed on IDEAS
    2. Marcel Franke & Bernhard K. J. Neumärker, 2022. "A Climate Alliance through Transfer: Transfer Design in an Economic Conflict Model," World, MDPI, vol. 3(1), pages 1-14, February.
    3. Cuesta, Jose, 2017. "Redistribution and military coups," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 7(1), pages 12-31.

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    Keywords

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    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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