The Micro-Foundations of Social Contracts, Civil Conflicts and International Peace-Making

MICROCON Research Working Paper No. 8

Posted: 21 Aug 2008

See all articles by José Cuesta

José Cuesta

Inter-American Development Bank (IDB)

Syed Mansoob Murshed

Institute of Social Studies (ISS)

Date Written: August 6, 2008

Abstract

This paper explores the micro-foundations of conflict generation and persistence within the traditional greed and grievance non-cooperative set up between a government and a rebel group. We expand the traditional model in various ways. First, we allow for the reaction curves of both parties in non-cooperative games to be substitutes and not inevitably complementary, so a peaceful strategy from a group may be followed by a belligerent upsurge from the other. Second, we also allow for diasporas' transfers to rebel groups, thus generating a trade-off between the gains associated with peace and war among rebels. Third, we expand external aid in the form of fungible financing of government transfers 'buying' peace by allowing for mechanisms that induce behavioural change towards peace in a cooperative model of principal-agent well-intended (Nordic-like) donors. 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.

Keywords: Civil war, Social Contract, Aid for Peace

JEL Classification: C78, D72, D74, D83

Suggested Citation

Cuesta, José and Murshed, Syed Mansoob, The Micro-Foundations of Social Contracts, Civil Conflicts and International Peace-Making (August 6, 2008). MICROCON Research Working Paper No. 8, Available at SSRN: https://ssrn.com/abstract=1243663

José Cuesta

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

Syed Mansoob Murshed (Contact Author)

Institute of Social Studies (ISS) ( email )

PO Box 29776
2502 LT The Hague, 2518 AX
Netherlands
+31 70 426 0591 (Phone)
+31 70 426 0799 (Fax)

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