The Economics of Conflict

Download or read book The Economics of Conflict written by Karl Erik Wärneryd and published by MIT Press. This book was released on 2014-03-07 with total page 305 pages. Available in PDF, EPUB and Kindle. Book excerpt: Modern economics has largely ignored the issue of outright conflict as an alternative way of allocating goods, assuming instead the existence of well-defined property rights enforced by an undefined third party. And yet even in ostensibly peaceful market transactions, conflict exists as an outside option, sometimes constraining the outcomes reached through voluntary agreement. In this volume, economists offer a crucial rational-choice perspective on conflict, using methodological approaches that range from the game theoretic to the experimental. This text uses the recently developed contest success function to model conflict, examining such topics as alliance formation, regional conflicts under fiscal federalism, coups d'etat in developing countries, and the correlation between conflict and economic growth in Bolivia. This text also considers subjects that include the link between occupational choices and antigovernment activity in Afghanistan, social unrest and the IMF's Structural Adjustment Program, and the effect of Tajikistan's civil war on ex-combatants' capacity for trust and cooperation. This text shows that economics needs a theory of conflict to understand both outright conflict and transactions in the shadow of conflict. It also shows that the study of conflict also needs the rigorous, methodology-based perspectives of economics.