Working Papers

Academic Year 2006-2007

Workshop on Endogenous Institutions and Political Conflict

CIG Working Paper No. 52

CIG Working Paper No. 53
James D. Fearon, Civil War Since 1945: Some facts and a theory

CIG Working Paper No. 54
Daron Acemoglu, Davide Ticchi and Andrea Vindigni, Emergence and Persistence of Inefficient States

CIG Working Paper No. 55
Pedro Dal Bo, Andrew Foster and Louis Putterman, Institutions and Behavior: Experimental Evidence on the Effects of Democracy

CIG Working Paper No. 56
John Bellows and Edward Miguel, War and Local Collective Action in Sierra Leone

CIG Working Paper No. 57
Catherine Hafer, Contests over Political Authority

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Political Polarization, (200kb .pdf file)
CIG Working Paper No. 52
Avinash K. Dixit
April 16, 2007

Failures of government policies often provoke opposite reactions from citizens; some call for a reversal of the policy while others favor its continuation in stronger form. We offer an explanation of such polarization, based on a natural bimodality of preferences in political and economic contexts, and consistent with Bayesian rationality.

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Civil War Since 1945: Some facts and a theory (210kb .pdf file)
CIG Working Paper No. 53
James D. Fearon, Stanford University
April 16, 2007

The most common form of civil war in the post-World War II period has been a stalemated guerrilla war confined to a rural periphery of a low-income, post-colonial state. Standard contest models of conflict do not capture important and distinctive features of insurgency, and in particular the fact that guerrilla survival depends on their controlling information about who and where they are. I present a game model in which rebel control of territory depends on how many remain uncaptured by government forces. Capture
becomes more likely as the rebel movement expands, due to network connections among the rebels. The model explains how and why insurgencies can remain stalemated at low levels of conflict. It also shows that standard explanations for the strong cross-national association between poverty and civil war risk – for example, that poverty makes joining a rebel band a more attractive option or that risk aversion makes the rich more fearful of conflict – are incoherent or strongly incomplete as typically stated. I argue that more plausible explanations for the empirical regularity pose an indirect link, via the association of high income with (a) natural and social terrains inimical to guerrilla hiding, (b) possibly state military capability to conduct more efficient counterinsurgency, and (c) inability to appropriate as large a share of income through house-to-house visits by guerrillas, due in part to the mobility of human capital.

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Emergence and Persistence of Inefficient States (590kb .pdf file)
CIG Working Paper No. 54
Daron Acemoglu, MIT
Davide Ticchi, University of Urbino
Andrea Vindigni, Princeton University
April 16, 2007

Inefficiencies in the bureaucratic organization of the state are often viewed as important factors in retarding economic development. Why certain societies choose or end up with such inefficient organizations has received very little attention, however. In this paper, we present a simple theory of the emergence and persistence of inefficient states based on patronage politics. The society consists of rich and poor individuals. The rich are initially in power, but expect to transition to democracy, which will choose redistributive policies. Taxation requires the employment of bureaucrats. We show that, under certain circumstances, by choosing an inefficient state structure, the rich may be able to use patronage and capture democratic
politics. This enables them to reduce the amount of redistribution and public good provision in democracy. Moreover, the inefficient state creates its own constituency and tends to persist over time. Intuitively, an inefficient state structure creates more rents for bureaucrats than would an efficient state structure. When the poor come to power in democracy, they will reform
the structure of the state to make it more efficient so that higher taxes can be collected at lower cost and with lower rents for bureaucrats. Anticipating this, when the society starts out with an inefficient organization of the state, bureaucrats support the rich, who set lower taxes but also provide rents to bureaucrats. We show that in order to generate enough political support,
the coalition of the rich and the bureaucrats may not only choose an inefficient organization of the state, but they may expand the size of bureaucracy “excessively” so as to gain additional votes. The model shows that an equilibrium with an inefficient state is more likely to arise when there is greater inequality between the rich and the poor, when bureaucratic rents take intermediate values and when individuals are sufficiently forward-looking.

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Institutions and Behavior: Experimental Evidence on the Effects of Democracy (191kb .pdf file)
CIG Working Paper No. 55
Pedro Dal Bo, Brown University
Andrew Foster, Brown University
Louis Putterman, Brown University
April 17, 2007

We present results from a novel experiment on the effect of a policy designed to encourage cooperation in a prisoner’s dilemma game. We find
that the effect of this policy on the level of cooperation is greater when it
was chosen democratically by the subjects than when it was exogenously
imposed. This difference remains after controlling for selection (those that
choose the policy may be more likely to be affected by it). We conclude that
the treatment effect of policies may depend on whether they are endogenous
or exogenous to the society on which they are imposed. Therefore,
democratic institutions may have an effect on behavior in addition to the
effect in terms of policy choice. More generally, our findings have implications for empirical studies of treatment effects in other contexts: the
effect of a treatment may depend on whether it is endogenous or exogenous.

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War and Local Collective Action in Sierra Leone (799kb .pdf file)
CIG Working Paper No. 56
John Bellows, UC Berkeley
Edward Miguel, UC Berkeley
April 17, 2007

We estimate the effects of the brutal 1991-2002 Sierra Leone civil war using unique nationally representative household data on conflict experiences, postwar economic outcomes, and local politics and collective action. Individuals whose households personally experienced more intense war violence are robustly more likely to attend community meetings, more likely to vote, more likely to contribute to local public goods, and are more aware of local politics. Several tests indicate selection into victimization is not driving the results. The relationship between conflict intensity and postwar outcomes is weaker at more aggregate levels, suggesting that the war’s primary impact was on individual preferences rather than on institutions or local social norms. More speculatively, the findings could help partially explain the rapid postwar economic and political recovery observed in Sierra Leone and after several other recent African civil wars.

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Contests over Political Authority (329kb .pdf file)
CIG Working Paper No. 57
Catherine Hafer, New York University
April 22, 2007

This paper analyzes a model of endogenous political authority in which authority may be established by force through a standoff. Two players have a mix of common and contrary interests; the resolution of the dispute is required to be self-sustaining, i.e. there is no external enforcement of agreements; and the players are uncertain about each other’s resolve, i.e., about the relative strength of their interests in one outcome over another. An equilibrium solution of the model provides insights into the duration of the contest over authority, its ultimate outcome, and the conditions under which a peaceful resolution is possible. I show that neither cheap talk nor impartial mediation promote peaceful resolutions or enhance efficiency. Costly signaling reduces the incidence of conflict but may consume more resources than the conflict it obviates.

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