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The Political Economy of Opposition Groups: Peace, Terrorism, or Civil Conflict

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  • Michael Jetter
  • Bei Li

Abstract

This paper proposes a simple framework to better understand an opposition group’s choice between peace, terrorism, and open civil conflict against the government. Our model implies that terrorism emerges if constraints on the ruling executive group are intermediate and rents are sizeable, whereas conflict looms under poor executive constraints. Analyzing annual data for up to 158 countries in a panel setting provides evidence consistent with these hypotheses. The results emerge both when considering the incidence and onset of terrorism and conflict. The corresponding magnitudes are economically sizeable. Overall, these findings can help us understand and anticipate the choices of opposition groups.

Suggested Citation

  • Michael Jetter & Bei Li, 2017. "The Political Economy of Opposition Groups: Peace, Terrorism, or Civil Conflict," CESifo Working Paper Series 6747, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_6747
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp6747.pdf
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    More about this item

    Keywords

    conflict; executive constraints; foreign aid; natural resource rents; oil rents; political institutions; rents; terrorism;

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • P47 - Economic Systems - - Other Economic Systems - - - Performance and Prospects
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

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