distribution of culturally diverse groups affects the outcome. To understand why ethnic diversity affects conflict and economic …

Macroeconomic costs of conflict are generally very large, with GDP per capita about 28 percent lower ten years after … conflict onset. This is overwhelmingly driven by private consumption, which falls by 25 percent ten years after conflict onset …. Conflict is also associated with dramatic declines in official trade, with exports (imports) estimated to be 58 (34) percent …

cooperation. Taken together, these contributions show that economics needs a theory of conflict to understand both outright …Modern economics has largely ignored the issue of outright conflict as an alternative way of allocating goods, assuming … peaceful market transactions, conflict exists as an outside option, sometimes constraining the outcomes reached through …

the colonization of much of the world by European powers starting in the fifteenth century. We then develop the basic … institutions, there is generally a conflict over these social choices, ultimately resolved in favor of groups with greater …