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Peace and War With Endogenous State Capacity

  • Michael McBride

    (Department of Economics, University of California, Irvine, CA, USA, mcbride@uci.edu)

  • Gary Milante

    (The World Bank, Washington, DC, USA)

  • Stergios Skaperdas

    (Department of Economics, University of California, Irvine, CA, USA)

We explore how peace or war can occur in the presence of commitment problems. These problems can be reduced by institutions of good governance or, alternatively, state capacity which (a) can be considered a collective good and (b) can be improved through investments. We show how the likelihood of a peace agreement depends on the level of state capacity and on investments in state capacity made by adversaries. In accordance with existing evidence but contrary to various theories of conflict, we find that income levels unambiguously increase the chance of peace. Among other issues, we discuss the critical role of external actors in encouraging or discouraging commitment and in developing good governance institutions.

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File URL: http://jcr.sagepub.com/content/55/3/446.abstract
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Article provided by Peace Science Society (International) in its journal Journal of Conflict Resolution.

Volume (Year): 55 (2011)
Issue (Month): 3 (June)
Pages: 446-468

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Handle: RePEc:sae:jocore:v:55:y:2011:i:3:p:446-468
Contact details of provider: Web page: http://pss.la.psu.edu/

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  1. Michael McBride & Stergios Skaperdas, 2009. "Conflict, Settlement, and the Shadow of the Future," CESifo Working Paper Series 2897, CESifo Group Munich.
  2. Michelle R. Garfinkel & Stergios Skaperdas, 2006. "Economics of Conflict: An Overview," Working Papers 050623, University of California-Irvine, Department of Economics, revised Sep 2006.
  3. Michael McBride & Stergios Skaperdas, 2005. "Explaining Conflict in Low-Income Countries: Incomplete Contracting in the Shadow of the Future," Working Papers 050606, University of California-Irvine, Department of Economics.
  4. Genicot, C. & Skaperdas, S., 2000. "Investing in Confict Management," Papers 00-01-17, California Irvine - School of Social Sciences.
  5. Hirshleifer, Jack, 1995. "Theorizing about conflict," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 7, pages 165-189 Elsevier.
  6. Michelle R Garfinkel & Stergios Skaperdas, 2001. "Conflict Without Misperceptions or Incomplete Information: How the Future Matters," Levine's Working Paper Archive 563824000000000011, David K. Levine.
  7. Christopher Blattman & Edward Miguel, 2010. "Civil War," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 3-57, March.
  8. Stergios Skaperdas, 2006. "Bargaining Versus Fighting," Working Papers 060705, University of California-Irvine, Department of Economics.
  9. Werner, Suzanne & Yuen, Amy, 2005. "Making and Keeping Peace," International Organization, Cambridge University Press, vol. 59(02), pages 261-292, April.
  10. Mario Chacón & James A. Robinson & Ragnar Torvik, 2011. "When is Democracy an Equilibrium? Theory and Evidence from Colombia’s La Violencia," Journal of Conflict Resolution, Peace Science Society (International), vol. 55(3), pages 366-396, June.
  11. Powell, Robert, 2006. "War as a Commitment Problem," International Organization, Cambridge University Press, vol. 60(01), pages 169-203, January.
  12. Anna K. Jarstad & Desiree Nilsson, 2008. "From Words to Deeds: The Implementation of Power-Sharing Pacts in Peace Accords," Conflict Management and Peace Science, Peace Science Society (International), vol. 25(3), pages 206-223, July.
  13. Anbarci, Nejat & Skaperdas, Stergios & Syropoulos, Constantinos, 2002. "Comparing Bargaining Solutions in the Shadow of Conflict: How Norms against Threats Can Have Real Effects," Journal of Economic Theory, Elsevier, vol. 106(1), pages 1-16, September.
  14. Avner Greif, 1997. "Self-enforcing Political System and Economic Growth: Late Medieval Genoa," Working Papers 97037, Stanford University, Department of Economics.
  15. 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.
  16. Robert H. Bates & Avner Greif & Margaret Levi & Jean-Laurent Rosenthal, 1998. "Analytic Narratives," Economics Books, Princeton University Press, edition 1, volume 1, number 6355, March.
  17. Jack Hirshleifer, 1995. "Theorizing About Conflict," UCLA Economics Working Papers 727, UCLA Department of Economics.
  18. Paul Collier & V. L. Elliott & Håvard Hegre & Anke Hoeffler & Marta Reynal-Querol & Nicholas Sambanis, 2003. "Breaking the Conflict Trap : Civil War and Development Policy," World Bank Publications, The World Bank, number 13938, March.
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