Peace and War with Endogenous State Capacity

Michael McBride (), Gary Milante () and Stergios Skaperdas

No 91002, Working Papers from University of California-Irvine, Department of Economics

Abstract: We explore how peace or war can occur in the presence of commitment problems. These problems can be reduced by institutions of good governance or, alternatively, state capacity which (i) can be considered a collective good and (ii) can be improved through investments. We show how the likelihood of a peace agreement depends on the level of state capacity and on investments in state capacity made by adversaries. In accordance with existing evidence but contrary to various theories of conflict, we find that income levels unambiguously increase the chance of peace. Among other issues, we discuss the critical role of external actors in encouraging or discouraging commitment and in developing good governance institutions.

Keywords: Institutions; Conflict; Governance (search for similar items in EconPapers)
JEL-codes: C73 H41 K00 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2009-09
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Citations: View citations in EconPapers (13)

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Related works:
Journal Article: Peace and War With Endogenous State Capacity (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:irv:wpaper:091002

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