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

Author

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  • José Cuesta
  • Syed Mansoob Murshed

Abstract

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 paper’s 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.

Suggested Citation

  • José Cuesta & Syed Mansoob Murshed, 2008. "On the Micro-Foundations of Contract versus Conflict with Implications for International Peace-Making," Research Department Publications 4591, Inter-American Development Bank, Research Department.
    • Handle: RePEc:idb:wpaper:4591
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    References listed on IDEAS

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    Cited by:

    1. Cuesta, Jose, 2017. "Redistribution and military coups," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 7(1), pages 12-31.
    2. Marcel Franke & Bernhard K. J. Neumärker, 2022. "A Climate Alliance through Transfer: Transfer Design in an Economic Conflict Model," World, MDPI, vol. 3(1), pages 1-14, February.

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    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • 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

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