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

  • Syed Mansoob Murshed
  • José A. Cuesta

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 papers 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 in its series IDB Publications (Working Papers) with number 6748.

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Date of creation: Aug 2008
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Handle: RePEc:idb:brikps:6748
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  1. Alberto Alesina & Sule Ozler & Nouriel Roubini & Phillip Swagel, 1992. "Political Instability and Economic Growth," NBER Working Papers 4173, National Bureau of Economic Research, Inc.
  2. 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.
  3. 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.
  4. Collier, Paul & Hoeffler, Anke, 2000. "Greed and grievance in civil war," Policy Research Working Paper Series 2355, The World Bank.
  5. Jean-Paul Azam, 2001. "The redistributive state and conflicts in Africa," CSAE Working Paper Series 2001-03, Centre for the Study of African Economies, University of Oxford.
  6. Addison, Tony & Murshed, S. Mansoob, 2001. "From Conflict to Reconstruction: Reviving the Social Contract," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  7. Azam, Jean-Paul & Mesnard, Alice, 2003. " Civil War and the Social Contract," Public Choice, Springer, vol. 115(3-4), pages 455-75, June.
  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.
  9. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
  10. Collier, Paul & Hoeffler, Anke, 1998. "On Economic Causes of Civil War," Oxford Economic Papers, Oxford University Press, vol. 50(4), pages 563-73, October.
  11. Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-21, September.
  12. Frances Stewart, . "Crisis Prevention: Tackling Horizontal Inequalities," QEH Working Papers qehwps33, Queen Elizabeth House, University of Oxford.
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