We construct a dynamic theory of civil conflict hinging on inter-ethnic trust and trade. The model economy is inhabitated by two ethnic groups. Inter-ethnic trade requires imperfectly observed bilateral investments and one group has to form beliefs on the average propensity to trade of the other...

Civil war is the most prevalent form of large-scale violence and is massively destructive to life, society, and the economy. The prevention of civil war is therefore a key priority for international attention. We present an empirical analysis of what makes countries prone to civil war. Using a...

Historical evidence suggests that poor population groups are more likely to engage in conflict. We construct a theoretical model of the choice between appropriation and production. Fully specified production functions allow for both symmetrical outcomes and for introducing inequalities in...

We establish a theoretical as well as empirical framework to assess the role of resource endowments and their geographic location for inter-State conflict. The main predictions of the theory are that conflict tends to be more likely when at least one country has natural resources; when the...