Volume 24, Issue 1

In this paper, we study alternative forms of conflict resolution, both peaceful and non-peaceful, between two countries that compete for claims to a resource used to produce potentially traded goods. Consistent with the classical liberal argument, peace supports mutually beneficial trade, whereas war preempts it. War always induces countries to allocate resources into non-contractible arming (“guns”) for superiority in conflict. Under peaceful settlement, countries might choose to arm as well for gaining leverage in negotiations, but arming is typically less than what it is under war. Building on the observation that arming itself affects the countries’ bargaining sets, we compare the efficiency properties of division rules generated by three prominent bargaining solutions – namely, splitting the surplus, equal sacrifice, and Nash bargaining – and show how they depend on the gains from trade.

This article proposes a dynamic model of rebellion, where three players individually decide to challenge their common adversary. It is formally demonstrated that the pattern of rebellion is determined endogenously, depending on the challengers’ resolve and strength. In other words, a challenger with more resolve and/or strength tends to fight earlier than others do.

What makes individuals tolerate government corruption? Can citizens tolerate government corruption but be intolerant of corrupt behavior in society? I argue not all attitudes toward corruption are the same. External territorial threats elicit a tolerance of government corruption since citizens allow for government corruption when they are concerned for their security. However, citizens become intolerant of corruption in society because they view this as maximizing individual welfare at the expense of the common good (i.e. security). Using data from three unique cross-national surveys, I find that citizens under territorial threat are less likely to think corruption is an important problem, are more likely to tolerate government corruption, but are less likely to tolerate corruption by private citizens.

Nigeria’s ethnically and religiously diverse Middle Belt has experienced recurrent eruptions of violence over the past several decades. Disputes between pastoralists and farmers arise from disagreements over access to farmland, grazing areas, stock routes, and water points for both animals and households. Although relatively low in intensity, this form of violence is widespread, persistent, and arguably increasing in its incidence. This study seeks to answer the question: How has farmer-pastoralist conflict affected state internally-generated revenues (IGR)? The literature on the effect of violence on sub-national fiscal capacity is slim to none. We use a synthetic control approach to model how IGR for four conflict-affected states – Benue, Kaduna, Nasarawa, and Plateau – would have developed in the absence of violence. To account for the endogeneity criticism commonly leveled at such synthetic control analyses, we then use a fixed-effects IV model to estimate IGR losses predicted by the synthetic control analysis as a function of farmer-pastoralist fatalities. Our conservative estimates for percentage reduction to annual state IGR growth for the four states are 0%, 1.2%, 2.6%, and 12.1% respectively, implying that IGR is likely much more sensitive to conflict than GDP. In total, the four study states of Benue, Kaduna, Nasarawa, and Plateau are estimated to have lost between US$719,000 and US$2.3 million in 2010 US dollars, or 22–47% of their potential IGR collection during the period of intense.

This study analyses the dynamics of causal linkages between terrorism and economic growth across four provinces of Pakistan using Bivariate and Trivariate Hsaio Granger Causality test. The empirical evidence reveals within country idiosyncratic causal trends; hence demonstrating the importance of analysing sub-national variations while determining the extent to which terrorism is related with other variables. The estimates suggest that terrorist activity Granger causes economic growth in Sindh, Khyber Pakhtunkhwa and Balochistan provinces. The reverse causation from economic growth to terrorism is observed in case of Khyber Pakhtunkhwa only. The evidence presented in this paper stresses the importance of taking into account higher vulnerability of comparatively weaker sub-national economies while formulating relevant policies to ameliorate negative impact of terrorism.