We examine two factors that help explain the prevalence of conflict in low-income countries: that adversaries cannot enforce long-term contracts in arms, and that open conflict alters the future strategic positions of the adversaries differently than does peace. Using an infinite horizon model,...

I critically review recent studies that estimate those costs of violence and conflict that can emerge among organized political groupings, from states, religious and ethnic organizations to guerillas and paramilitaries. The review includes studies that estimate direct and indirect costs due to...

We examine how socio-political conflict in Bolivia has affected its economic performance since the 1970s. Such conflict includes strikes, demonstrations, road blockades, and conventional rent-seeking. Since conflict has costs, it diverts resources away from production, tends to reduce investment...

We augment the canonical neoclassical model of trade to allow for interstate disputes over land, oil, water, or other resources. The costs of such disputes in terms of arming depend on the trade regime in place. Under either autarky or free trade, the larger country (in terms of factor...

We examine settings - such as litigation, labor relations, or arming and war - in which players first make non-contractible up-front investments to improve their bargaining position and gain advantage for possible future conflict. Bargaining is efficient ex post, but we show that a player may...

Strikes, just as other types of conflict, used to be difficult to explain from an economic perspective. Initially, it was thought that they were a result of mistakes or irrationality. Then, during the 1980s an explosion of research brought asymmetric information to prominence as a significant...

How can the West’s economic and political polarization be explained? We argue that persuasive lobbying at various levels of government leads to systematic deviations of policies from those desired by the majority. Implemented policies diverge from the majority position despite centripetal...

Typically, economics assumes that property rights over productive resources or goods are perfectly defined and costlessly enforced. The costs of insecurity and the resultant conflict are, however, real and often economically significant. In this paper, we examine how international trade regimes...