Indicators of Potential Conflict

This paper focuses on the main factors that contribute to the dangers of violent internal conflict erupting, or re-igniting after a peace has been concluded. The conflict literature has identified greed and grievance as the principle causes of conflict. But for either of them to take the form of large-scale violence there must be other factors at work, specifically a weakening of the 'social contract'. Such a viable social contract can be sufficient to restrain opportunistic behaviour such as theft of resource rents and violent expression of grievance. The social contract, therefore, refers to the mechanisms and institutions of peaceful conflict resolution. Three main risk factors are considered in this briefing: The breakdown of redistributive mechanisms, democratic transitions and lack of economic progress.Conflict, civil war, greed versus grievance, social contract, democratic transition, redistributive mechanisms

Social Contracts, Civil Conflicts and International Peacemaking

The regularity with which peace deals break down and civil wars resume is well established. This briefing looks at the factors that drive violent conflicts, and the factors that may undermine peace deals, including those brokered and supported by international third parties. For peace to last, agreements must be viable, credible and enforceable, and the commitment of donors must not be in doubt. For these conditions to be in place, conflict resolution must be in donors' interests.Civil war, Social Contract, Aid for Peace

On the Interaction between Fear and Hatred

This paper models conflictual interaction between a European state and a domestic dissident immigrant minority group, Muslims say, some of whom may resort to acts of terrorism. Here, identity is crucial and provides the micro-foundations of dissident behaviour by solving the collective action problem; however, complex multiple identities are possible. Militancy or hatred of the West arises both because of the economic and social disadvantage experienced by Muslims or horizontal inequalities, as well as historical grievances and contemporary foreign policy actions that discriminate against the Muslim world. The fear of visible Muslim minorities among the European host population may be a product of strident propaganda emanating from certain segments of Western society. The innovation of the paper lies in modelling the interaction between fear and hatred. Excessive deterrence against 'dangerous' minority groups may backfire, compared to more accommodative policies. Space needs to be created so that Muslim migrants are able to merge their personal identities within their adopted European homelands. Also, the economic disadvantage experienced by Muslims needs redressing.European Security, Conflict, Terrorism

Strategic Interaction and Donor Policy Determination in a Domestic Setting

aid effectiveness, political processes, endogenous policy formation

What Turns a Blessing into a Curse? The Political Economy of Natural Resource Wealth (Invited Lecture)

I review the relationship between natural resource endowment type and economic growth in developing countries. Certain types of natural resources, such as oil and minerals, tend to exhibit concentrated production and revenue patterns, while revenue flows from other resources such as agriculture are more diffuse. Most developing countries that export products from the first group have been prone to growth failure in recent times. The most important channels are political economy mechanisms, where there are negative relationships between natural resource rents and institutional development. An explicit model of growth collapse with micro-foundations in rent-seeking contests that have increasing returns in rent-seeking outlays is presented.Endowment Type, Growth, Institutions

Threat Perceptions in Europe: Domestic Terrorism and International Crime

This paper focuses on two areas of security concern for the European Union: terrorism and international crime. I present a model of game-theoretic interaction between a European state and a domestic dissident group, who, on occasion, may resort to acts of terrorism. Here, identity is crucial to the putative terrorist, providing the microfoundations of dissident group behaviour by solving the collective action problem. I also sketch a macromodel of drugs production in a conflict-ridden developing country, where I argue that demand-side policies of regulation may be better than policies that are aimed at eradicating supply. As far as the policy implications are concerned, first excessive deterrence against potential terrorists may backfire. Secondly, space needs to be created so that Muslim migrants are able to merge their personal identities within their adopted European homelands. Thirdly, the economic discrimination against Muslims in Europe needs to be redressed. Finally, aid to fragile drug producing states should be broad-based and poverty reducing, not just benefiting warlords.European Security, Conflict, Terrorism, Narcotics Trade

Indivisibility, Fairness, Farsightedness and their Implications for Security

fair division, commitment, peace treaties, terrorist motivation

Tax Competition, Globalization and Declining Social Protection

Tax competition, Fiscal policy, Social protection, Political processes

Conditionality and Endogenous Policy Formation in a Political Setting

aid conditionality, fiscal policy, political processes, endogenous policy formation

On the Non-Contractual Nature of Donor-Recipient Interaction in Development Assistance

This paper analyses three issues in strategic donor-recipient interaction motivated by the complexity of the rationale underlying aid. The first is when we have several principals with conflicting objectives. Any one principal cannot offer high powered incentives to the agent to carry out their designated task. The second is to do with the fact that effort associated with ensuring aid effectiveness may concern both principal and agent; the optimal solution to which requires difficult to design cooperative behaviour. Consequently, the contractual type principal-agent relationship between donors and recipients is inappropriate. We need to consider models that signal recipient quality or commitment to reform. A simple model of signalling with commitment problems is presented, along with extensions to multiple types of agents and time periods, as well as possible solutions involving mechanism design.aid, conditionality, contracting, signalling quality, mechanism design