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War Signals: A Theory of Trade, Trust and Conflict

Author

Listed:
  • Mathias Thoenig

    (University of Lausanne)

  • Fabrizio Zilibotti

    (University of Zurich)

  • Dominic Rohner

    (University of Zurich)

Abstract

The theory bears some testable predictions. First, the probability of future civil wars increases after each conflict episode. Second, a sequence of "accidental" conflicts can lead to the permanent breakdown of trust, plunging a society into a state of recurrent conflicts (a war trap). This situation is irreversible and is characterized by weak cross-community trade links even in peace times. War traps are robust to additional sources of social learning, such as people learning from the direct observation of the history of cross-community trade. The incidence of conflict can be reduced by policies abating cultural barriers, fostering human capital and targeting beliefs. Coercitive peace policies such as peacekeeping forces or externally imposed regime changes have instead no persistent effects.

Suggested Citation

  • Mathias Thoenig & Fabrizio Zilibotti & Dominic Rohner, 2011. "War Signals: A Theory of Trade, Trust and Conflict," 2011 Meeting Papers 281, Society for Economic Dynamics.
  • Handle: RePEc:red:sed011:281
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Jonas Hjort, 2013. "Ethnic Divisions and Production in Firms," CESifo Working Paper Series 4449, CESifo Group Munich.
    2. Stefano Costalli & Luigi Moretti & Costantino Pischedda, 2017. "The economic costs of civil war," Journal of Peace Research, Peace Research Institute Oslo, pages 80-98.
    3. Francesco Caselli & Massimo Morelli & Dominic Rohner, 2015. "The Geography of Interstate Resource Wars," The Quarterly Journal of Economics, Oxford University Press, vol. 130(1), pages 267-315.
    4. Couttenier, Mathieu & Preotu, Veronica & Rohner, Dominic & Thoenig, Mathias, 2016. "The Violent Legacy of Victimization: Post-Conflict Evidence on Asylum Seekers, Crimes and Public Policy in Switzerland," CEPR Discussion Papers 11079, C.E.P.R. Discussion Papers.
    5. Mueller, Hannes & Rohner, Dominic & Sch�nholzer, David, 2017. "The Peace Dividend of Distance: Violence as Interaction Across Space," CEPR Discussion Papers 11897, C.E.P.R. Discussion Papers.
    6. Cornelius Christian & James Fenske, 2015. "Economic shocks and unrest in French West Africa," CSAE Working Paper Series 2015-01, Centre for the Study of African Economies, University of Oxford.
    7. Bluhm, Richard & Gassebner, Martin & Langlotz, Sarah & Schaudt, Paul, 2016. "Fueling conflict? : (De)escalation and bilateral aid," MERIT Working Papers 053, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Dominic Rohner & Mathias Thoenig & Fabrizio Zilibotti, 2013. "Seeds of distrust: conflict in Uganda," Journal of Economic Growth, Springer, vol. 18(3), pages 217-252, September.
    9. Daron Acemoglu & Alexander Wolitzky, 2012. "Cycles of Distrust: An Economic Model," Levine's Working Paper Archive 786969000000000502, David K. Levine.
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    11. Alessandra Cassar & Pauline Grosjean & Sam Whitt, 2013. "Legacies of violence: trust and market development," Journal of Economic Growth, Springer, vol. 18(3), pages 285-318, September.
    12. Xin, Guangyi, 2017. "Trust and Economic Performance: A Panel Study," MPRA Paper 80815, University Library of Munich, Germany.
    13. repec:ebd:wpaper:159 is not listed on IDEAS
    14. Ola Olsson, 2016. "Climate Change and Market Collapse: A Model Applied to Darfur," Games, MDPI, Open Access Journal, vol. 7(1), pages 1-27, March.
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    17. Doepke, Matthias & Zilibotti, Fabrizio, 2014. "Culture, Entrepreneurship, and Growth," Handbook of Economic Growth,in: Handbook of Economic Growth, edition 1, volume 2, chapter 0, pages 1-48 Elsevier.
    18. Yann Algan & Pierre Cahuc, 2014. "Trust, Well-Being and Growth: New Evidence and Policy Implications," Post-Print hal-01169659, HAL.
    19. Morelli, Massimo & Rohner, Dominic, 2015. "Resource concentration and civil wars," Journal of Development Economics, Elsevier, pages 32-47.
    20. Fenske, James & Kala, Namrata, 2017. "1807: Economic shocks, conflict and the slave trade," Journal of Development Economics, Elsevier, pages 66-76.
    21. Morelli, Massimo & Rohner, Dominic, 2015. "Resource concentration and civil wars," Journal of Development Economics, Elsevier, pages 32-47.
    22. Francesco Caselli, 2012. "The Geography of Inter-State Resource Wars," 2012 Meeting Papers 1174, Society for Economic Dynamics.
    23. Gunes Gokmen, 2012. "Economic Clash? The Role of Cultural Cleavages in Bilateral Trade Relations," EcoMod2012 4252, EcoMod.
    24. repec:gam:jgames:v:7:y:2016:i:1:p:9:d:66071 is not listed on IDEAS
    25. Achyuta Adhvaryu & James Fenske, 2013. "War, resilience and political engagement in Africa," CSAE Working Paper Series 2013-08, Centre for the Study of African Economies, University of Oxford.

    More about this item

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • 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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