Models of Conflict

Lecture 6 part A, Political Economics I

OSIPP, Osaka University

24 November, 2017

Masa Kudamatsu

Motivations

Civil conflicts are widespread across the world

Experienced by 56% of the countries since 1960

Defined as conflicts with 25+ deaths per year

(Armed Conflict Database)

Last more than 10 years for 20% of the countries

Why do people wage a costly war?

Three major modelling approaches

to analyze conflict

Contest Model

Asymmetric information

Lack of commitment

1

2

3

Contest Model

Originally proposed as a model of lobbying

by Tullock (1980), reprinted in Lockard and Tullock (2001)

 

For a theoretical survey, see Garfinkel and Skaperdas (2006)

Model

Model (cont.)

(Known as "contest success function")

Model (cont.)

Analysis

Analysis (cont.)

Analysis (cont.)

Analysis (cont.)

Analysis (cont.)

Evidence

Dube and Vargas (2013 Restud) provide evidence

A nice example of how to conduct

theoretically-motivated

instrumental variable estimation with a panel data

Evidence: Data

Figure 1 of Dube and Vargas (2013)

Evidence: Estimation equation

Evidence: Estimation equation

Evidence: Estimation equation

Evidence: Estimation equation

Evidence: Estimation equation

Evidence: Predictions

Evidence: Identification strategy

Evidence: Identification strategy

Evidence: Identification strategy

Evidence: Identification strategy

Evidence: Identification strategy

Evidence: Identification strategy

Evidence: Results (Tables II & III)

Latest research on economic factors

McGuirk and Burke (2017)

A rise in food price reduces conflict over territory

but increases conflict over crop harvests

Berman et al. (2017 AER)

For all minerals and all African countries

a higher price on mineral increases local conflict

Rebels from an area with mines spread conflict more likely

in support of the feasibility channel of the resource curse

Latest research on economic factors

Impact of temperature

Meta analysis by Burke, Hsiang, and Miguel (2015)

Temperature 

by 1 s.d.

Conflict 

by 11.3%

Iyguin, Nunn, and Qian (2017)

For 1400-1900, a drop in temperature increases conflicts

Latest research on economic factors

Impact of foreign aid

Nunn and Qian (2014 AER)

US food aid increases conflicts in recipient countries

Instrumented by wheat production in US

Crost et al. (2014 AER)

Development aid programs increase conflicts in the Philippines

Municipalities below the poverty threshold receive aid

      Regression discontinuity

Extensions of the contest model

Network externalities (Konig et al. 2017 Econometrica)

Define the contest success function for group \(i\) as

\frac{\phi_i(x_i, \mathbf{x}_{-j})}{\sum_j \phi(x_j, \mathbf{x}_{-j})}
ϕi(xi,x−j)∑jϕ(xj,x−j)\frac{\phi_i(x_i, \mathbf{x}_{-j})}{\sum_j \phi(x_j, \mathbf{x}_{-j})}
\phi_i(x_i,\mathbf{x}_{-i})=x_i+\beta\sum_{k\in A_i}x_k-\gamma\sum_{k\neq A_i} x_k
ϕi(xi,x−i)=xi+β∑k∈Aixk−γ∑k≠Aixk\phi_i(x_i,\mathbf{x}_{-i})=x_i+\beta\sum_{k\in A_i}x_k-\gamma\sum_{k\neq A_i} x_k

where

and \(A_i\) is a set of groups allied with group \(i\)

\(\beta\) and \(\gamma\) are estimated from data for the Congo War

by instrumenting \(x_k\) with rainfall in group \(k\)'s homeland

Extensions of the contest model (cont.)

How ethnic diversity intensifies conflict

(Esteban and Ray 2011, Esteban, Mayoral, and Ray 2012 AER)

The prize of winners is either public or private goods

p_i \frac{1-\lambda}{n_i} + \sum p_j \lambda u_{ij} - c(r_i)
pi1−λni+∑pjλuij−c(ri)p_i \frac{1-\lambda}{n_i} + \sum p_j \lambda u_{ij} - c(r_i)

Share of the prize divided among group i members

Share of the prize used for public good

The higher \(\lambda\), the polarization of ethnic groups's preference matters more than the fractionalization of ethnic groups

Applications of the contest model

to other topics than conflicts

Endogenous private property rights (Skaperdas 1992)

Lobbying

Kang (2016 Restud) to structurally estimate the return to lobbying

Avis et al. (2017) to estimate the impact of capping campaign spending in Brazil

Francois et al. (2017) to analyze factional politics in China

Applications of the contest model

to other topics than conflicts (cont.)

Private property rights (Skaperdas 1992)

Endogenous institutions

Nation states (Alesina et al. 2017) 

Weak, despotic, or inclusive states (Acemoglu and Robinson 2017)

Limitations of the contest model

to explain the cause of conflicts

Information asymmetry

Fearon (1995)

Basic idea

Model (1 out of 2)

Model (2 out of 2)

The role of information

Limitation

Lack of Commitment

Powell (2006)

Basic idea

Model (1 out of 2)

Model (2 out of 2)

Analysis (1 of 2)

Analysis (2 of 2)

Intuition

An application of the commitment model

A theory of regime changes between autocracy and democracy

Acemoglu and Robinson (2000, 2001, 2006)

Democracy is a commitment device for the rich

to transfer to the poor in the future

Other reasons for conflict

Reason #4

Political leaders do not internalize the cost of war

Jackson and Morelli (2007 AER) for theory

McGuirk et al. (2017) for evidence

US legislators with drought-age sons

support pro-conscription bills

more likely than those with drought-age daughters

Jones and Olken (2009) for related evidence

Successful assassination of national leaders

leads to the end of a war more likely than failed attempts

Reason #4 (cont.)

Related evidence on the role of political leaders

Jones and Olken (2009)

Successful assassination of national leaders

leads to the end of a war more likely than failed attempts

Dube and Harish (2017)

Queens, especially married queens, staged a war

more likely than kings

Reason #5

Grievance

Bai and Jia (2016 Econometrica)

The revolt against the Qing dynasty in early 20th century

mostly took place in prefectures

where many could have become a bureaucrat by passing the civil service exam (abolished in 1905)

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