Contract or war? On the rules of the game in civil wars

Abstract

Economists have developed a number of theories based on warlord or bandit models to explain intra-state conflict or civil war. Ethnographic studies from civil wars, however, suggest that livelihoods and institutions in the context of a war economy are very complex, more complex than those models suggest. This paper reviews concepts that are discussed in the literature on institutions and applies these to an analysis of the emergence and logic of the rules of the game in the political economy of civil wars. The analysis indicates that contracting in civil wars, whether complete or incomplete—and the opportunity to grab (Skaperdas), to loot (Collier) and to exploit others (Hirshleifer)—takes place on many different scales and between different agents, not only among combatants. This creates a complex, dynamic and hybrid institutional amalgam of coercively imposed rules, traditional norms and co-existing formal institutions.