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International Relative Prices and Civil Wars in Sub-Saharan Africa. Theory and Evidence over the period (1995-2006)

  • Caruso, Raul

This paper presents first a theoretical model of conflict between two agents characterized by a two-sector economy. In a contested sector two agents struggle to appropriate the maximum possible fraction of a contestable output. In an uncontested sector, they hold secure property rights over the production of some goods. Agents split their resource endowment between ‘butter’, ‘guns’ and ‘ice-cream’. Eventually, tradable goods made of butter and ice-cream produced by conflicting parties are both sold to the Rest of the world. Therefore, the opportunity cost of conflict depends also on relative profitability of contested and uncontested production. In particular, productivity of uncontested production and profitability of contested sectors are countervailing forces. The empirical section focused on a panel of Sub-Saharan African countries for the period 1995-2006. Results are not fully conclusive. However, there is robust evidence that prices of manufactures (interpreted as the uncontested ice-cream) are negatively associated with the likelihood of a civil war. Eventually, international price of manufactures is also associated with a higher GDP per capita growth rate. The concluding remark seems to be that an increase in world prices of manufactures would make civil wars less likely.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 29761.

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Date of creation: Mar 2011
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Handle: RePEc:pra:mprapa:29761
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  1. Chen, John-Ren & Stocker, Herbert, 1997. "Composite commodities and the Prebisch-Singer thesis," World Development, Elsevier, vol. 25(11), pages 1863-1871, November.
  2. Michelle R. Garfinkel & Stergios Skaperdas & Constantinos Syropoulos, 2005. "Globalization and Domestic Conflict," International Trade 0507005, EconWPA.
  3. Markus Brückner & Antonio Ciccone, 2010. "International Commodity Prices, Growth and the Outbreak of Civil War in Sub-Saharan Africa," Economic Journal, Royal Economic Society, vol. 120(544), pages 519-534, 05.
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  8. repec:ebl:ecbull:v:4:y:2007:i:17:p:1-8 is not listed on IDEAS
  9. Johannes Münster & Klaas Staal, 2011. "War with Outsiders Makes Peace Inside," Conflict Management and Peace Science, Peace Science Society (International), vol. 28(2), pages 91-110, April.
  10. Besley, Timothy J. & Persson, Torsten, 2008. "The Incidence of Civil War: Theory and Evidence," CEPR Discussion Papers 7101, C.E.P.R. Discussion Papers.
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  13. Skaperdas, Stergios & Syropoulos, Constantinos, 1996. "Can the shadow of the future harm cooperation?," Journal of Economic Behavior & Organization, Elsevier, vol. 29(3), pages 355-372, May.
  14. Paul Collier & Benedikt Goderis, 2007. "Commodity Prices, Growth, and the Natural Resource Curse: Reconciling a Conundrum," CSAE Working Paper Series 2007-15, Centre for the Study of African Economies, University of Oxford.
  15. Nicholas Sambanis, 2002. "A Review of Recent Advances and Future Directions in the Quantitative Literature on Civil War," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(3), pages 215-243.
  16. Matthew J. Baker, 2003. "An Equilibrium Conflict Model of Land Tenure in Hunter-Gatherer Societies," Journal of Political Economy, University of Chicago Press, vol. 111(1), pages 124-173, February.
  17. Daron Acemoglu & James A. Robinson, 2006. "De Facto Political Power and Institutional Persistence," American Economic Review, American Economic Association, vol. 96(2), pages 325-330, May.
  18. Michelle R. Garfinkel & Stergios Skaperdas, 2006. "Economics of Conflict: An Overview," Working Papers 050623, University of California-Irvine, Department of Economics, revised Sep 2006.
  19. Torvik, Ragnar, 2002. "Natural resources, rent seeking and welfare," Journal of Development Economics, Elsevier, vol. 67(2), pages 455-470, April.
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  21. Polachek Solomon W., 1999. "Conflict and Trade: An Economics Approach to Political International Interactions," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 5(2), pages 1-32, April.
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