trade to aid eu s temporary tariff waivers for flood hit pakistan in this paper we study the effectiveness of the first large scale unilateral trade concessions as foreign aid for disaster relief i e eu tariff waivers on goods heavily exported by pakistan which was severely hit by the 2010 floods using a triple difference approach and a synthetic control approach we find that the tariff waivers substantially increased pakistan s exports to the eu the export hike occurred within a few months after the waivers became effective and did not significantly depress exports by competing countries while the export boost brought greater employment opportunities in the tariff waived industries we find little evidence that the greater labor demands from trade were particularly beneficial to the areas most affected by the floods our findings suggest that trade policy may complement traditional means of foreign aid but trade concessions alone may be inadequate as the areas most affected by natural disasters may be poorly targeted

analysis of policies to reduce oil consumption and greenhouse gas emissions from the us transportation sector abstract even as the us debates an economy wide co 2 cap and trade policy the transportation sector remains a significant oil security and climate change concern transportation alone consumes the majority of the us s imported oil and produces a third of total us greenhouse gas ghg emissions this study examines different sector specific policy scenarios for reducing ghg emissions and oil consumption in the us transportation sector under economy wide co 2 prices the 2009 version of the energy information administration s eia national energy modeling system nems a general equilibrium model of us energy markets enables quantitative estimates of the impact of economy wide co 2 prices and various transportation specific policy options we analyze fuel taxes continued increases in fuel economy standards and purchase tax credits for new vehicle purchases as well as the impacts of combining these policies all policy scenarios modeled fail to meet the obama administration s goal of reducing ghg emissions 14 below 2005 levels by 2020 purchase tax credits are expensive and ineffective at reducing emissions while the largest reductions in ghg emissions result from increasing the cost of driving thereby damping growth in vehicle miles traveled

commodity price shocks and civil conflict evidence from colombia how do income shocks aect armed con ict theory suggests two op posite eects if labor is used to appropriate resources violently higher wages may lower con ict by reducing labor supplied to appropriation this is the opportunity cost eect alternatively a rise in contestable income may increase violence by raising gains from appropriation this is the rapacity eect our paper exploits exogenous price shocks in inter national commodity markets and a rich dataset on civil war in colombia to assess how dierent income shocks aect con ict we examine changes in the price of agricultural goods which are labor intensive and natural resources which are capital intensive we focus on coee and oil the two largest exports we nd that a sharp fall in coee prices in the 1990s increased violence dierentially in regions growing more coee by lower ing wages and the opportunity cost of joining armed groups in contrast a rise in oil prices increased violence dierentially in the oil region by in creasing municipal revenue siphoned through rapacity this pattern holds in several other agricultural and natural resource sectors providing robust evidence that price shocks aect con ict in opposite directions depending on the factor intensity of the commodity

testing for the long run relationship between nominal interest rates and inflation using cointegration techniques 1989 testing for the long run relationship between nominal interest rates and inflation using cointegration techniques applied economics vol 21 no 4 pp 439 447

conditional cash transfers civil conflict and insurgent influence experimental evidence from the philippines abstract conditional cash transfer cct programs are an increasingly popular tool for reducing poverty in conflict affected areas despite their growing popularity there is limited evidence on how cct programs affect conflict and theoretical predictions are ambiguous we estimate the effect of conditional cash transfers on civil conflict in the philippines by exploiting an experiment that randomly assigned eligibility for a cct program at the village level we find that cash transfers caused a substantial decrease in conflict related incidents in treatment villages relative to control villages in the first 9 months of the program using unique data on local insurgent influence we also find that the program reduced insurgent influence in treated villages an analysis of possible spillovers yields inconclusive results while we find no statistical evidence of spillovers we also cannot rule out that the village level effect was due to displacement of insurgent activity from treatment to control villages

the sword and the shield the economics of targeted sanctions abstract how effective are smart sanctions in imposing costs on an adversary we consider this question in a model where a targeted regime may choose to shield strategically important firms from harm using detailed firm and individual data we estimate the impact on firm performance from smart sanctions deployed by the u s and eu against russia beginning in 2014 we find significant losses in operating revenue asset values and employees for sanctioned firms relative to their non sanctioned peers which are greater in sectors dependent upon western service inputs strategic firms systemically outperform non strategic firms under sanctions implying a cost of shielding to the regime that adds substantially to the total cost of sanctions jel f5

who is at the wheel when communities drive development evidence from the philippines summary community driven development cdd approaches have become an important part of development operations using data from 1 200 households in 66 communities participating in a cdd project in the philippines we analyze how communities select their proposals and how resources are allocated across villages resources flow to the poorest and more politically active villages controlling for poverty more unequal villages are more likely to receive funding this surprising result is because in more unequal villages the elected village leader is more likely to override community preferences and to influence inter village competition such that project resources flow to their villages

modern energy access to all in rural india an integrated implementation strategy abstract expanding energy access to the rural population of india presents a critical challenge for its government the presence of 364 million people without access to electricity and 726 million who rely on biomass for cooking indicate both the failure of past policies and programs and the need for a radical redesign of the current system we propose an integrated implementation framework with recommendations for adopting business principles with innovative institutional regulatory financing and delivery mechanisms the framework entails establishment of rural energy access authorities and energy access funds both at the national and regional levels to be empowered with enabling regulatory policies capital resources and the support of multi stakeholder partnership these institutions are expected to design lead manage and monitor the rural energy interventions at the other end trained entrepreneurs would be expected to establish bioenergy based micro enterprises that will produce and distribute energy carriers to rural households at an affordable cost the escos will function as intermediaries between these enterprises and the international carbon market both in aggregating carbon credits and in trading them under cdm if implemented such a program could address the challenges of rural energy empowerment by creating access to modern energy carriers and climate change mitigation

the effects of potential land development on agricultural land prices abstract we conduct a national scale analysis of the determinants of agricultural land values the theoretical basis for the study is a spatial city model with stochastic returns to future land development the empirical model of agricultural land prices is estimated with a cross section on approximately three thousand counties in the contiguous us the results provide evidence that option values associated with irreversible and uncertain land development are capitalized into current farmland values for each county we decompose the current agricultural land value into components measuring rents from agricultural production and rents from future land development

the fisher effect and the term structure of interest rates tests of cointegration the literature on the fisher effect has ignored the potential relationship between inflation and long term interest rates using an expectations model of the term structure of interest rates the authors establish the conditions under which innovations in short term inflation will be transmitted to long term as well as short term interest rates cointegration tests find support for both the fisher effect and the expectations theory of the term structure copyright 1993 by mit press

modest secure and informed successful development in conflict zones abstract most interpretations of prevalent counterinsurgency theory imply that increasing government services reduces rebel violence empirically however development programs and economic activity sometimes increase violence using new panel data on development spending in iraq we show that violence reducing effects of development assistance are greater when i projects are small ii troop strength is high and iii professional development expertise is available these findings are consistent with an information centric hearts and minds model which implies that violence reduction is greatest when projects are secure valued by community members and services derived are conditional on government control of the territory

a re examination of real interest rate parity empirical investigation based on consumer price index based real interest rates is used to conclude that real interest rate parity is not supported in this paper the authors employ three panel based unit root tests provided by andrew levin and chien fu lin 1992 kyung so im hashem m pesaran and yongcheol shin 1995 and g s maddala and shaowen wu 1996 to examine the stationarity of real interest differentials using monthly observations on euro market rates they support the mean reverting property of real interest differentials and hence the real interest rate parity this finding is consistent with the observation that international integration of financial markets has increased dramatically since 1979

can workfare programs moderate conflict evidence from india can public interventions persistently reduce conflict adverse weather shocks through their impact on incomes have been identified as robust drivers of conflict in many contexts an effective social insurance system moderates the impact of adverse shocks on household incomes and hence could attenuate the link between these shocks and conflict this paper shows that a public employment program in india by providing an alternative source of income through a guarantee of 100 days of employment at minimum wages effectively provides insurance this has an indirect pacifying effect by weakening the link between productivity shocks and incomes the program uncouples productivity shocks from conflict leading persistently lower conflict levels

nation building through foreign intervention evidence from discontinuities in military strategies this study uses discontinuities in u s strategies employed during the vietnam war to estimate their causal impacts it identifies the effects of bombing by exploiting rounding thresholds in an algorithm used to target air strikes bombing increased the military and political activities of the communist insurgency weakened local governance and reduced noncommunist civic engagement the study also exploits a spatial discontinuity across neighboring military regions that pursued different counterinsurgency strategies a strategy emphasizing overwhelming firepower plausibly increased insurgent attacks and worsened attitudes toward the u s and south vietnamese government relative to a more hearts and minds oriented approach

agricultural extension and technology adoption for food security evidence from uganda we evaluate causal impacts of a large scale agricultural extension program for smallholder women farmers on technology adoption and food security in uganda through a regression discontinuity design that exploits an arbitrary distance to branch threshold for village program eligibility we find eligible farmers used better basic cultivation methods achieved improved food security given minimal changes in adoption of relatively expensive inputs we attribute these gains to improved cultivation methods that require low upfront monetary investment farmers also modified their shock coping methods these results highlight the role of information and training in boosting agricultural productivity among poor farmers and indirectly improving food security

the predictive power of yield spreads for future interest rates evidence from the danish term structure the predictive power of yield spreads for future interest rates is examined using a new database of zero coupon bonds yields from the danish bond market the evidence shows that during the period of monetary targeting 1976 1 1985 7 yield spreads have substantial predictive power and the results tend to support the rational expectations version of the classical expectations theory of the term structure however for the recent period 1985 8 1991 12 characterized by a shift to a policy of interest rate targeting the predictive power of yield spreads disappears

targets of violence evidence from india s naxalite conflict this paper considers how shocks to rural incomes intensify violence in india s naxalite insurgency using variation in annual rainfall in a panel of district level fatal incidents between 2005 and 2011 i find that deficient rainfall generally spurs targeted violence against civilians but the number of maoist attacks against security forces only increases in mining districts this finding consistent with the idea that the relationship between income shocks and conflict depends on the type of targets and the revenue sources of the rebels in particular the fighting capacity of rebel groups against government forces could benefit more from negative rural income shocks if the group s resources are sufficiently independent from the agricultural economy as is the case in mining areas

more powerful panel data unit root tests with an application to mean reversion in real exchange rates unit root tests seeking mean or trend reversion are frequently applied to panel data we show that more powerful variants of commonly applied tests are readily available moreover power gains persist when the modifications are applied to bootstrap procedures that may be employed when cross correlation of a rather general sort among individual panel members is suspected copyright 2004 john wiley sons ltd

civil conflict and forced migration the micro determinants and welfare losses of displacement in colombia summary forced displacement in colombia has soared due to the escalating internal conflict the purpose of this paper is twofold first to identify adequate instruments for addressing the problem of displacement by estimating its determinants and comparing these findings with the standard migration literature second to estimate its welfare losses thus providing evidence as to whether the response to this problem has been proportional to its size we find that the welfare losses caused by displacement are 37 of the net present value of rural lifetime aggregate consumption our empirical findings also show that a violent environment modifies the net benefits of migration

civil conflict and conditional cash transfers effects on demobilization summary cash transfer programs have been successful in helping millions of people afford better livelihoods while this is well known little research has yet been conducted to examine the power of such programs to influence outcomes in times of conflict especially in countries where anti poverty programs are implemented amidst disputes against illegal armed groups this paper focuses on the implementation of familias en accion a flagship anti poverty cash transfer program in colombia during the early 2000s when the country was still experiencing its long lasting internal conflict impact evaluations have already shown the important effects of this program on household poverty levels and children s time allocation including a higher incidence of school attendance and a lower incidence of child labor our hypothesis here is that such outcomes imply changes in the dynamics of the civil conflict since 50 of the demobilised combatants are children mostly eligible for the transfers we take advantage of a natural experiment that occurred during the first stage of implementation of the program in the period 2001 04 when the transfers were gradually rolled out across eligible municipalities by setting out a difference in differences approach our results indicate that the program had positive effects on the demobilisation of combatants these findings are observed for a length of three years since the program started

reshaping institutions evidence on aid impacts using a pre analysis plan this brief summarizes the results of a gender impact evaluation study entitled reshaping institutions evidence on aid impacts using a pre analysis plan conducted between 2005 and 2009 in sierra leone the study observed the impact of pre analysis plan pap on local institutions by imposing participation requirements for marginalized groups including women and test for learning by doing effects in sierra leone on the individual and village level requiring women and young adults to take on leadership positions participate in project meetings and sign off on project finances does not have any persistent effect on their participation in local decision making or attitudes regarding leadership ability the project successfully established village organizations and tools to manage the project the distributions of the project s benefits were equitable and leakage was minimal there was a significant positive impact on the stock and quality of local public infrastructure however there are no detectible changes in the ability to raise funds for local public goods decision making process or social norms and attitudes funding for the study derived from the gobifo project the institutional reform and capacity building project ircbp the world bank development impact evaluation dime the horace w goldsmith foundation the international growth center 3ie and the national bureau of economic research nber african successes project

workers warriors and criminals social conflict in general equilibrium we incorporate appropriation activities social conflict into canonical models of trade and study how economic shocks and policies affect the intensity of conflict we show that not all shocks that could make society richer reduce conflict positive shocks to labor intensive industries diminish conflict while positive shocks to capital intensive industries increase it the key requirement is that conflict activities be more labor intensive than the economy as this determines how shocks affect the returns and costs of conflict our theory is consistent with several observed patterns of conflict and implies that empirical work should take into account the relative factor intensities of the productive and conflict sectors in each country incorporating appropriation into a canonic general equilibrium model affects what policies may be deemed desirable in order to reduce conflict and generate pareto improvements policy must be distortionary while reforms that appear efficiency enhancing under the unrealistic assumption of perfect property rights may backfire this offers one explanation for why reforms based on traditional models without appropriation may be delayed and become unpopular when implemented and why societies may sympathize with seemingly inefficient redistribution

conflict and rent seeking success functions ratio vs difference models of relative success the rent seeking competitions studied by economists fall within a much broader category of conflict interactions that also includes military combats election campaigns industrial disputes lawsuits and sibling rivalries in the rent seeking literature each party s success pi which can be interpreted either as the probability of victory or as the proportion of the prize won has usually been taken to be a function of the ratio of the respective resource commitments alternatively however pi may instead be a function of the difference between the parties commitments to the contest the contest success function csf for the difference from is a logistic curve in which as is consistent with military experience increasing returns apply up to an inflection point at equal resource commitments a crucial flaw of the traditional ratio model is that neither onesided submission nor two sided peace between the parties can ever occur as a cournot equilibrium in contrast both of these outcomes are entirely consistent with a model in which success is a function of the difference between the parties resource commitments

inflation real returns and capital investment we find evidence for the hypothesis of mundell 1963 and tobin 1965 that the expected real return component of interest rates is negatively related to the expected inflation component in the mundell tobin model the variation in expected real returns is caused by the variation in expected inflation our evidence suggests however that the variation in expected real returns is more fundamentally an outcome of the capital expenditures process equilibrium expected real returns vary directly with capital expenditures in order to induce equilibrium allocations of resources between consumption and investment this positive relation between expected real returns and real activity which comes out of the real sector combines with a negative relation between expected inflation and real activity which is traced to the monetary sector thus inducing the negative relation between expected inflation and expected real returns predicted by mundell and tobin but explained in terms of a model much different from theirs

rationalist explanations for war realist and other scholars commonly hold that rationally led states can and sometimes do fight when no peaceful bargains exist that both would prefer to war against this view i show that under very broad conditions there will exist negotiated settlements that genuinely rational states would mutually prefer to a risky and costly fight popular rationalist and realist explanations for war fail either to address or to explain adequately what would prevent leaders from locating a less costly bargain essentially just two mechanisms can resolve this puzzle on strictly rationalist terms the first turns on the fact that states have both private information about capabilities and resolve and the incentive to misrepresent it the second turns on the fact that in specific strategic contexts states may be unable credibly to commit to uphold a mutually preferable bargain historical examples suggest that both mechanisms are empirically plausible

aid under fire development projects and civil conflict we estimate the causal effect of a large development program on conflict in the philippines through a regression discontinuity design that exploits an arbitrary poverty threshold used to assign eligibility for the program we find that barely eligible municipalities experienced a large increase in conflict casualties compared to barely ineligible ones this increase is mostly due to insurgent initiated incidents in the early stages of program preparation our results are consistent with the hypothesis that insurgents try to sabotage the program because its success would weaken their support in the population

terms of trade shocks in africa are they short lived or long lived abstract this paper examines the persistence of shocks to the terms of trade using annual data on 42 sub saharan african countries for the period 1960 96 instead of using unit root tests to distinguish between stationary and random walk processes for the terms of trade this paper characterizes the persistence of shocks using point and interval estimates of the half lives of terms of trade shocks using median unbiased mu estimation techniques that remove the downward bias of standard least squares ls estimators we find that the cross country average of the half lives of terms of trade shocks is about 6 years it is also found that the estimated persistence of african terms of trade shocks varies widely for about one half of the countries their half lives are short lived less than 4 years while for one third of the countries their half lives are long lived permanent the majority of african countries are found to have terms of trade that typically experience finitely persistent transitory shocks which is consistent with the reversion of terms of trade to their long run trends

application of stochastic simulation and policy sensitivity techniques to a macroeconomic model of uganda stochastic simulation techniques are applied to study a small macroeconomic model of uganda previously studied using deterministic simulations it was found that stochastic simulations sometimes reverse single shot policy rankings arrived at using deterministic procedures in general policy effects are rather sensitive to the exact parameters and error term of the model and hence to the true structure of the ugandan economy policy sensitivity experiments yield results which suggest that the financial policy stance is crucial to the potency of budgetary policy more importantly the results help distinguish between the problem and favourable instruments in a number of policy packages applicable to uganda

war and conflict in economics theories applications and recent trends we review the main economic models of war and conflict these models vary in details but their implications are qualitatively consistent highlighting key commonalities across a variety of conflict settings recent empirical literature employing both laboratory and field data in many cases confirms the basic implications of conflict theory however this literature also presents important challenges to the way economists traditionally model conflict we finish our review by suggesting ways to address these challenges

unit roots and persistence in the nominal interest rate a confirmatory analysis applied to the oecd this paper investigates the stochastic properties of long term and short term nominal interest rates for the oecd over the post war era for that purpose we employ univariate unit root tests as well as panel unit root and stationarity tests that explicitly allow for cross sectional dependence overall we find overwhelming evidence that the nominal interest rate contains a unit root which may be driven by a stochastic common factor the computation of half lives through impulse response functions also points to a high degree of persistence this has important implications for the cointegration analysis of the fisher equation the uncovered interest parity and the term structure jel classification

persistent fighting and shifting power three striking features about both interstate and civil war are 1 there are often periods of persistent fighting 2 fighting commonly ends in negotiated settlements as well as in militarily decisive outcomes and 3 fighting sometimes recurs this article links these features to shifts in the distribution of power and to the fact that one of the functions of fighting is to forestall adverse shifts the analysis centers on a simple model of state consolidation the equilibrium displays these features fighting occurs when the distribution of power is shifting rapidly the factions avoid fighting and cut deals when the distribution of power shifts slowly or is stable fighting resumes if the distribution of power again begins to shift rapidly the analysis also shows that state consolidation can occur without fighting if the process is sufficiently slow fighting now rather than later can also reduce the total cost of fighting

does head start improve children s life chances evidence from a regression discontinuity design this paper exploits a new source of variation in head start funding to identify the program s effects on health and schooling in 1965 the office of economic opportunity oeo provided technical assistance to the 300 poorest counties to develop head start proposals the result was a large and lasting discontinuity in head start funding rates at the oeo cutoff for grant writing assistance we find evidence of a large drop at the oeo cutoff in mortality rates for children from causes that could be affected by head start as well as suggestive evidence for a positive effect on educational attainment i introduction head start was established in 1965 as part of the war on poverty to provide preschool health and other social services to poor children age three to five and their families and currently serves over 900 000 children each year at a cost of around 7 billion hhs 2006 this paper provides new evidence on the effects of the head start program on schooling and health by drawing on a new source of variation in program funding spe

unpacking the effect of decentralized governance on routine violence lessons from indonesia summary we study the effect of decentralization on routine violence in indonesia we unpack decentralization along multiple dimensions and consider the individual effects of local elections the creation of new administrative units fiscal transfers and local public service delivery we use comprehensive data from indonesia s national violence monitoring system nvms a new dataset that records the incidence and impact of violence in indonesia we use these data to examine the relationship between the different dimensions of decentralization and different types of local violence in indonesian districts during 2001 10 our analyses suggest that there is a positive association between local service delivery and at least some forms of violence we argue that the positive effect of service delivery on violence is due to newly generated distributive conflicts among local ethnic groups around the control over and access to services by comparison district splitting and the introduction of direct elections of district heads are negatively associated with some forms of violence there is little evidence that fiscal transfers in general mitigate conflict

us food aid and civil conflict we study the effect of us food aid on conflict in recipient countries our analysis exploits time variation in food aid shipments due to changes in us wheat production and cross sectional variation in a country s tendency to receive any us food aid according to our estimates an increase in us food aid increases the incidence and duration of civil conflicts but has no robust effect on interstate conflicts or the onset of civil conflicts we also provide suggestive evidence that the effects are most pronounced in countries with a recent history of civil conflict jel d74 f35 o17 o19 q11 q18 we are unable to determine whether our aid helps or hinders one or more parties to the conflict it is clear that the losses particularly looted assets constitutes a serious barrier to the efficient and effective provision of assistance and can contribute to the war economy this raises a serious challenge for the humanitarian community can humanitarians be accused of fueling or prolonging the conflict in these two countries medecins sans frontieres amsterdam 1

rethinking economic development i provide a summary reflection and assessment of the current state of economic development in both the policy and academic worlds in terms of development policy currently the primary focus is on policy interventions namely foreign aid aimed at fixing the deficiencies of developing countries academic research also has a similar focus except with an emphasis in rigorous evaluation of interventions to estimate causal effects a standard set of versatile quantitative tools is used e g experimental and quasi experimental methods which can be easily applied in a range of settings to estimate the causal effects of policies which are typically presumed to be similar across contexts in this article i take a step back and ask whether the current practices are the best that we can do are foreign aid and policy interventions the best options we have for poverty alleviation what else can be done is our current research strategy characterized by rigorous but a lack of context specific analysis the best method of analysis is there a role for other research methods for a deeper understanding of the local context and for more collaboration with local scholars repenser le developpement economiquee dans cet article je propose un apercu une reflexion et une evaluation de l etat actuel du developpement economique a la fois dans les spheres politiques et universitaires en matiere de developpement economique l attention est principalement portee sur l intervention politique c est a dire l aide exterieure visant a corriger les defaillances des pays en developpement les recherches universitaires y portent une attention similaire mais en mettant davantage l accent sur l evaluation rigoureuse de ces memes interventions pour en mesurer les effets de causalite a cette fin un ensemble d outils quantitatifs et modulables standard sont utilises notamment par l entremise de methodes experimentales et quasi experimentales pouvant facilement s appliquer a une vaste gamme de situations et ce aux fins d evaluations des liens de causalite engendres par ces politiques liens habituellement consideres comme similaires d un contexte a l autre dans cet article je prends un peu de recul pour m interroger sur la pertinence des pratiques actuelles les interventions politiques et l aide exterieure offrent elles les meilleures options pour reduire la pauvrete que pouvons nous faire d autre notre strategie de recherche actuelle caracterisee par des analyses rigoureuses mais peu adaptees a des contextes specifiques est elle la meilleure d autres methodes de recherche peuvent elles permettre de mieux comprendre les contextes regionaux et favoriser une meilleure collaboration avec les intellectuels locaux

can development aid contribute to social cohesion after civil war evidence from a field experiment in post conflict liberia civil war is very common in the develop ing world with harmful welfare effects when it occurs many fear that the devastation wrought by violent conflict destroys social capital impedes economic development and leads to the recur rence of violence paul collier et al 2003 in response donors are injecting large amounts of aid into post conflict countries a significant share of this assistance is spent on community driven reconstruction cdr programs which support the establishment of new local institu tions in order to promote social reconciliation whether this assistance has this effect is how ever largely unknown can brief foreign funded efforts to build local institutions in fact have posi tive effects on local patterns of cooperation we address this question using a randomized field experiment to evaluate the impact of a cdr project in northern liberia the project was funded by the united kingdom s department for international development dfid and imple mented by the international rescue committee irc the project attempted to build demo cratic community level institutions for making and implementing decisions about local public goods this model of support for participatory processes to enhance local public goods provi

welfare spending and political conflict in latin america 1970 2010 abstract we study an age old question in political economy does government spending on welfare ensure peace this question was at the heart of the european welfare state model of the early 20th century and remains relevant today in face of rising inequalities and political conflict yet there is limited empirical evidence about this question we make use of a panel of 12 latin american countries over the period 1970 2010 to show that welfare spending has led to substantial reductions in conflict across the region this effect is more pronounced when associated with reductions in inequality and increasing social and institutional trust

the inefficient use of power costly conflict with complete information recent work across a wide range of issues in political economy as well as in american comparative and international politics tries to explain the inefficient use of power revolutions civil wars high levels of public debt international conflict and costly policy insulation in terms of commitment problems this paper shows that a common mechanism is at work in a number of these diverse studies this common mechanism provides a more general formulation of a type of commitment problem that can arise in many different substantive settings the present analysis then formalizes this mechanism as an inefficiency condition that ensures that all of the equilibria of a stochastic game are inefficient this condition has a natural substantive interpretation large rapid changes in the actors relative power measured in terms of their minmax payoffs may cause inefficiency

out of the ashes into the fire the consequences of u s weapons sales for political violence abstract we examine the effect of u s weapons purchases on political violence in 191 countries during the period 1970 2008 our identification strategy exploits exogenous shifts in the cost of purchasing u s commercial weapons through a combination of time variation in u s inflation and cross sectional variation in a country s historical frequency of purchases we find that weapons purchases reduce the likelihood of political repression but increase the likelihood of onset of civil war in purchasing countries the results suggest that state investment in military capability incites civil war in countries where state repression of an aggrieved opposition would have otherwise prevailed