Peace Economics, Peace Science and Public Policy

List of Referees/Reviewers 2011

Raul Caruso — Wed, 11 Jan 2012 13:41:10 PST

A list of of Referees/Reviewers for 2010 for Peace Economics, Peace Science and Public Policy.

2010 Lewis Fry Richardson Lifetime Achievement Award: Ron P. Smith and the Economics of War and Peace

Vincenzo Bove et al. — Fri, 02 Dec 2011 13:50:38 PST

Ron P. Smith is the winner of the 2010 Lewis Fry Richardson Lifetime Achievement Award, which honours exemplary scholarly contributions to the scientific study of militarized conflict by researchers based in Europe for most of their career. This essay summarizes Smith’s scholarly achievements. Smith’s research shows how economic analysis can be helpful to analyse peace and security issues, very much in the spirit of Richardson’s efforts to use scientific methods to study war and peace.

Preventing Mass Killings: Determining the Optimal Allocation of Security Resources between Crowded Targets

Sunniva F. Meyer — Fri, 23 Sep 2011 13:38:46 PDT

This paper (1) translates theoretical notions of optimal security allocations into concrete policy recommendations and (2) compares these recommendations with actual transport security policy and transport security allocations in Norway. I argue that when protecting against mass-casualty attacks, priority should be given to potential targets that would suffer high casualties and that have a high number of foreign travelers, low employee density, many hiding places, many entry/exit points, high passenger anonymity, and high system fragility. Interviews with Norwegian transport authorities suggest that budget constraints and international commitments, rather than concerns for efficiency at the aggregate (national) level, determine the authorities’ allocation of security resources.

Core and Periphery — The Dual Effect of Terror

Amir Shoham et al. — Mon, 19 Sep 2011 23:03:37 PDT

In this paper we analyze the impact of terrorist attacks conducted in Israel during the Second Intifada (2000-2006) on the Israeli stock market. The impact is assessed by differentiating between attacks in the center of Israel (what is termed here the core region) and attacks in the periphery (the southern and northern areas of the country). We use the event study technique to evaluate the effects of the attacks on abnormal returns on the Israeli stock market. Our major finding is that a terrorist attack in the center of Israel has a significant negative effect on the stock market on the day it happens and a significant cumulative negative effect for several days afterward. However, when the attack takes place in the periphery, it has a less significant effect and no lasting impact after the first day.

Military Expenditures and Human Development: Guns and Butter Arguments Revisited: A Case Study from Egypt

Hamid E. Ali — Sun, 18 Sep 2011 01:06:41 PDT

This study theoretically and empirically tests the relationship between military spending and social spending in Egypt using data from 1987–2005. The theoretical results show that the crowding-out of social spending is ambiguous, unless the government is fully allocating its tax receipts to the military. The crowding-out of social spending by military spending lacks theoretical and empirical justification.

Socio-Economic Development and Violence: An Empirical Application for Seven Metropolitan Areas in Colombia

Alexander Cotte Poveda — Wed, 14 Sep 2011 02:30:24 PDT

This work uses several empirical approaches to examine the effects of poverty and inequality on violence in the seven metropolitan areas in Colombia. To this end, this study describes the main determinants of violence in these cities; these determinants are all fundamental features of social instability. For this description, this paper uses several econometric approximations to compare and determine an adequate estimator for the analysis of Colombian urban violence. This hypothesis was supported by evidence showing that factors related to poverty, inequality, and education directly influenced violence in the cities. Because of their effects over time and their incidence rates across society, these factors also had negative effects on the economic and social development of every city analysed.

Commitment among Fighters: A Research Note

Roos Haer — Sat, 27 Aug 2011 02:03:28 PDT

The key idea of this paper is that the level of commitment among combatants should be analyzed to get a better understanding of civil war duration and the survival of armed groups. The empirical application focuses on a sample collected during field research in the Democratic Republic of the Congo. Bayesian analyses show that the ways in which fighters are recruited and the amount of training and promotion they receive have a significant, reliable effect on the level of affective organizational commitment showed by the fighters.

A Database on the Mozambican Civil War

Patrick Domingues — Fri, 13 May 2011 14:12:07 PDT

Despite the fact that the Mozambican Civil War was one of the most violent civil war, no data is available at the intra-country level pertaining to this conflict. This paper introduces a new micro-level database and proposes a geo-temporal analysis of the evolution of this conflict. This database provides information on the province-level location, the district-level location, and the dates of 1,723 events related to this conflict. It also provides the latitude and longitude for 551 of these events. This database also classifies these collected events and provides the location of 22 rebel bases. Furthermore, this database provides the start and end dates of the conflict for each province, highlighting the differences in the duration of the conflict across the Mozambican provinces.

The Political Economy of the Creeping Militarization of U.S. Foreign Policy

Christopher J. Coyne — Mon, 09 May 2011 13:50:56 PDT

This paper analyzes the political economy of the creeping militarization of U.S. foreign policy. The core argument is that in integrating the “3D” approach—defense, development, and diplomacy—policymakers have assigned responsibilities to military personnel which go beyond their comparative advantage, requiring them to become social engineers tasked with constructing entire societies. Evidence from The U.S. Army Stability Operations Field Manual is presented to illustrate the wide scope of responsibilities assigned to the U.S. military. The tools of political economy are used to analyze some of the implications.

Endogenous Institution in Decentralization

Iwan J. Azis — Mon, 09 May 2011 13:50:34 PDT

Decentralization policy by itself is not a panacea for problems of accountability. A model is developed to exemplify a condition whereby given widespread ‘capture’ in local elections, voices or people’s participation stands out as the most important factor that determines whether the decentralization system produces positive or negative local capture. The size of local budget and the initial welfare condition matter as well. The latter can also explicate the persistent gap between poor and rich regions observed in many countries. The welfare effect of the policy depends on the behavior and quality of local leader that govern the interplay of the above factors. The model can thus produce multiple equilibria. To the extent that the quality and behavior of local leader play a critical role, a three-player coordination game is constructed to reflect the hypothesis postulated by the theory of endogenous institution.

On Third-Party Intervention in Conflicts: An Economist's View

J. Atsu Amegashie — Fri, 22 Apr 2011 00:19:26 PDT

The paper discusses some important issues in third-party intervention from the viewpoint of an economist. However, given the multi-disciplinary dimension of this topic, it is impossible to undertake such a discussion from a purely economic point of view. Therefore, the paper raises some issues that will be of interests to non-economists. It draws attention to some important research questions.

Media Freedom and Socio-Political Instability

Sudeshna Pal — Sat, 05 Mar 2011 11:42:24 PST

Free media may reduce incidents of socio-political instability. Different types of socio-political instability have been shown to have a negative effect on investment and economic growth. This study examines the effect of free media on various indicators of socio-political instability. Using a panel of 98 countries over 1994-2005, this study shows that media free from government control and interference may decrease different forms of socio-political instability because it puts internal and external pressure on self-interested governments to act in the best interests of citizens—rather than their own. The empirical results suggest that a freer media is associated with lower levels of socio-political instability as measured by ethnic tensions, external and internal conflicts, crime and disorder, military participation in government and religious tensions. The estimates are robust to several sensitivity tests.

Predation and Production in a Core-Periphery Model: A Note

Topher L. McDougal — Sat, 05 Mar 2011 11:42:22 PST

Rural-urban divides have characterized recent violent insurgencies around the world, but there are important differences in dynamics: sometimes rural insurgents target cities and sometimes not; sometimes the combat frontier is blurry, other times neat. This paper attempts to construct a simple model of the rural-urban relationship in conflict to understand when predators will attempt to prey on cities, versus when they remain in the hinterlands. It takes Krugman’s (1991) core-periphery model as a starting point, in which there are just two regions, A and B (perhaps rural and urban), and two sectors. However, the model is modified such that the sectors are not “manufacturing” and “agriculture,” but rather production and predation, after Hirshleifer (1991), which can both occur in either or both regions. It finds that at middling levels of predation and/or high transportation costs, rural predatory actors will target cities. At high levels of predation and/or low transportation costs, however, multiple stable equilibria may arise, creating disincentives for rural predatory actors to target cities.

Lone Wolf Terrorism

Peter J. Phillips — Sat, 05 Mar 2011 11:42:18 PST

The purpose of this paper is to investigate the insights that might be generated into the nature of ‘lone wolf terrorism’ through the application of economic analysis. Orthodox approaches, particularly (standard) expected utility analysis and game theoretical analysis, are discussed. These tools prove useful in developing preliminary or ‘first order’ insights. The lone wolf terrorist exhibits a number of idiosyncrasies that present challenges to both economic analysis and government security policy. An alternative analytical framework is constructed wherein a terroristic agent makes choices on the basis of a preference ordering constructed over two moments of the distribution (measured in terms of fatalities generated by terrorist attacks). Seven predictions are yielded from the mean-variance theoretical framework and numerical estimates are computed as preliminary steps towards the full exploration of the implications of the framework. Most importantly, depending on their level of risk aversion (or risk seeking behaviour), lone wolves are expected to predominantly choose assassination, armed attack, bombing, hostage taking or unconventional attacks. Furthermore, within a range of between one and two standard deviations from the mean, it is possible that the quadratic utility function will reach a maximum. Following attacks of a certain magnitude (in terms of fatalities), it might be expected that the lone wolf will withdraw from activity for a period of time. This analytical approach may assist governments and security agencies facing the threat of lone wolf terrorism.

Land Inequality and Conflict in Sub-Saharan Africa

Petros Sekeris — Thu, 06 Jan 2011 10:15:25 PST

This note succinctly reviews the existing literature on natural resources and conflicts while giving special emphasis on a particular type of natural resource, productive land. Treating land as a separate natural resource constitutes an essential step in our understanding of the roots of conflicts because of the intrinsic peculiarities of productive land. Indeed, contrary to other “lootable” resources, the opportunity cost of fighting over land is the agricultural product itself, while a second major distinction lies in the value of the prize, i.e. agricultural production, which is typically very low, thus implying that the fighting technologies are rather rudimentary. Putting in perspective the existing theoretical and empirical literature, we construct a convincing argument underlying the determinant role of relative (versus absolute) land scarcities in triggering conflicts.

On the Salience of Identity in Civilizational and Sectarian Conflict

Syed Mansoob Murshed — Thu, 06 Jan 2011 10:15:23 PST

This paper models two forms of low intensity conflict based on identity: civilizational conflict between Muslim migrants and the ‘West’ in European countries, and sectarian violence between religious groups in certain developing countries. Both historical grievances and current material inequalities can motivate individuals to join or refrain from violence in aid of a group cause. With civilizational conflict, hatred of the West arises because of economic disadvantage among Muslims, historical grievances and contemporary foreign policy deemed to be against Muslims. Fear of Muslim minorities among the European population may result from strident propaganda. Without tackling inequalities of opportunity, policies of assimilating migrants are doomed to failure. Sectarian conflict in developing countries like India is driven both by prospect of loot and hatred of the other. Localized conditions are salient in this regard. Poverty and inequality reduction and positive local social capital are key to addressing this type of conflict. Historical factors that shape the myths placing certain minorities adversely within society also need addressing.

Peace Science and Peace Economics Can Help Win the Fight against Nuclear Proliferation

Michael D. Intriligator — Thu, 06 Jan 2011 10:15:22 PST

There is a possibility of significant proliferation of nuclear weapons in the future, with various chains of proliferation as occurred earlier. This time, the chains could start from North Korea, Iran, and Burma (Myanmar) and spread respectively in Northeast Asia, in the Middle East and North Africa, and in Southeast Asia as well as in Eastern Europe, the southern cone of South America, and elsewhere. Peace science and peace economics could play constructive roles in preventing this dangerous development by studying the problem historically using case studies and by analyzing the economics and psychology behind proliferation decisions.

On the Cost of Violence and the Benefit of Peace

Jurgen Brauer et al. — Thu, 06 Jan 2011 10:15:19 PST

Among economists, there seems to exist an unfortunate lack of understanding of the complexities of war and violence and the effects on economy and society. The cost of the 2008/9 world economic and financial crisis, for example, amounted to a world GDP decline of much less than one percent in 2009—far smaller than the cost that violence imposes. This lack of understanding has created problems in the design of preconflict-, conflict-, and postconflict policies, leaving a sometimes unrecognized legacy of violence and loss. This essay deals with some of the economic issues involved.

Current Research and Future Directions in Peace Economics: Trade Gone Awry

Solomon W. Polachek — Thu, 06 Jan 2011 10:15:17 PST

This paper develops a general theory of human interactions. It applies the theory to current developments in peace economics indicating how the theory is currently employed and how the theory can be utilized in future research.

Aspects of Peace Economics

Raymond Dacey et al. — Thu, 06 Jan 2011 10:15:15 PST

The Economics of Peace can be modeled as a basic multi-game system composed of economic games played between and among firms and consumers in each of two nations, domestic pressure games played by firms, consumers, and the government within each nation, and political games played between the governments of the two nations. The integrated study of the basic system is given in the account of two-level games (Putnam, 1988). The details of these games were sketched in Dacey (1994, 1996-a) and are updated here via the results obtained in the assassin models presented in Carlson and Dacey (2009, forthcoming). While the field has made numerous advances in the last sixteen years, the conclusion of Dacey (1994) still holds — Peace Economics, as initially characterized by Isard (1994) and Polachek (1994), consists in the resolution of conflicts arising in the multi-game system. Since the games are played rationally, the tools of Peace Economics are the tools of the general theory of rational choice.