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Peace and War with Endogenous State Capacity

  • Michael McBride

    ()

    (Department of Economics, University of California-Irvine)

  • Gary Milante

    ()

    (World Bank)

  • Stergios Skaperdas

    ()

    (Department of Economics, University of California-Irvine)

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 (i) can be considered a collective good and (ii) 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://www.economics.uci.edu/files/docs/workingpapers/2009-10/skaperdas-2.pdf
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Paper provided by University of California-Irvine, Department of Economics in its series Working Papers with number 091002.

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Length: 24 pages
Date of creation: Sep 2009
Date of revision:
Handle: RePEc:irv:wpaper:091002
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Web page: http://www.economics.uci.edu/

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  1. 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.
  2. 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.
  3. McBride, Michael & Skaperdas, Stergios, 2014. "Conflict, settlement, and the shadow of the future," Journal of Economic Behavior & Organization, Elsevier, vol. 105(C), pages 75-89.
  4. Garance Genicot & Stergios Skaperdas, 2002. "Investing in Conflict Management," Journal of Conflict Resolution, Peace Science Society (International), vol. 46(1), pages 154-170, February.
  5. 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.
  6. Avner Greif, 1997. "Self-enforcing Political System and Economic Growth: Late Medieval Genoa," Working Papers 97037, Stanford University, Department of Economics.
  7. Anbarci, N. & Skaperdas, S. & Syropoulos, C., 2000. "Comparing Bargaining Solutions in the Shadow of Conflict: How Norms Against Threats Can Have Real Effects," Papers 00-01-19, California Irvine - School of Social Sciences.
  8. Stergios Skaperdas, 2006. "Bargaining Versus Fighting," Working Papers 060705, University of California-Irvine, Department of Economics.
  9. Powell, Robert, 2006. "War as a Commitment Problem," International Organization, Cambridge University Press, vol. 60(01), pages 169-203, January.
  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. 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, September.
  12. Werner, Suzanne & Yuen, Amy, 2005. "Making and Keeping Peace," International Organization, Cambridge University Press, vol. 59(02), pages 261-292, April.
  13. Michael McBride & Stergios Skaperdas, 2005. "Explaining Conflict in Low-Income Countries: Incomplete Contracting in the Shadow of the Future," CESifo Working Paper Series 1636, CESifo Group Munich.
  14. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, Elsevier.
  15. Christopher Blattman & Edward Miguel, 2010. "Civil War," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 3-57, March.
  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.
  17. 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.
  18. Jack Hirshleifer, 1995. "Theorizing About Conflict," UCLA Economics Working Papers 727, UCLA Department of Economics.
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