Introduction Baseline Model Full Model Conclusion Coercion Conflict Commodities Jacobus Cilliers University of Oxford March 17, 2013
Introduction Baseline Model Full Model Conclusion Introduction When and why do armed groups coerce?
Introduction Baseline Model Full Model Conclusion Introduction When and why do armed groups coerce? Coercion is common. "more died from starvation whilst working on the rice farms than were killed by combatants"
Introduction Baseline Model Full Model Conclusion Introduction When and why do armed groups coerce? Coercion is common. "more died from starvation whilst working on the rice farms than were killed by combatants" Strong focus of international community is trade sanctions of "blood minerals" in resource conflicts
Introduction Baseline Model Full Model Conclusion Introduction When and why do armed groups coerce? Coercion is common. "more died from starvation whilst working on the rice farms than were killed by combatants" Strong focus of international community is trade sanctions of "blood minerals" in resource conflicts However, need economic theory to predict what impact of change in economic incentives would be on civilian conditions
Introduction Baseline Model Full Model Conclusion Preview Model: Two sector trade model, with "armed group" in resource sector
Introduction Baseline Model Full Model Conclusion Preview Model: Two sector trade model, with "armed group" in resource sector Results Coercion depends on the ( i ) type of resource, ( ii ) factor endowments, and ( iii ) distribution of military strength. In particular:
Introduction Baseline Model Full Model Conclusion Preview Model: Two sector trade model, with "armed group" in resource sector Results Coercion depends on the ( i ) type of resource, ( ii ) factor endowments, and ( iii ) distribution of military strength. In particular: Coercion increases with the price of the resource if there is 1 only one armed group, but decreases if there are many groups.
Introduction Baseline Model Full Model Conclusion Preview Model: Two sector trade model, with "armed group" in resource sector Results Coercion depends on the ( i ) type of resource, ( ii ) factor endowments, and ( iii ) distribution of military strength. In particular: Coercion increases with the price of the resource if there is 1 only one armed group, but decreases if there are many groups. Coercion decreases if military strength concentrated with one 2 armed group.
Introduction Baseline Model Full Model Conclusion Preview Model: Two sector trade model, with "armed group" in resource sector Results Coercion depends on the ( i ) type of resource, ( ii ) factor endowments, and ( iii ) distribution of military strength. In particular: Coercion increases with the price of the resource if there is 1 only one armed group, but decreases if there are many groups. Coercion decreases if military strength concentrated with one 2 armed group.
Introduction Baseline Model Full Model Conclusion Preview Model: Two sector trade model, with "armed group" in resource sector Results Coercion depends on the ( i ) type of resource, ( ii ) factor endowments, and ( iii ) distribution of military strength. In particular: Coercion increases with the price of the resource if there is 1 only one armed group, but decreases if there are many groups. Coercion decreases if military strength concentrated with one 2 armed group. Implication : impact of trade policy depends on both the type of commodity and nature of conflict on the ground.
Introduction Baseline Model Full Model Conclusion Conflict and Coercion Ownership over land and labour Figure: Armed groups fight each other for control over resources and coerce cilivians in the extraction of resources
Introduction Baseline Model Full Model Conclusion Conflict and Coercion "with minor exceptions, the objective of military activity is either to secure access to mining sites or ensure a supply of captive labour " UN Panel of Expert Report on ongoing conflict in Kivu provinces, eastern DRC in 2002.
Introduction Baseline Model Full Model Conclusion Conflict and Coercion No Monopoly over Violence Figure: With no monopoly over violence, armed groups can coerce civilians, but are under constant threat of attack from other groups
Introduction Baseline Model Full Model Conclusion Conflict and Coercion Trade-off "since the... informal cease-fire in January 2004, there has been comparatively little fighting...[the armed groups] rather have focused their energies more on oppressing the civilian population"
Introduction Baseline Model Full Model Conclusion Monopoly over violence Model Armed groups choose level of employment, L R , and coercion, c , in resource sector: p R G ( T R , L R ) − w ( L R − L C ( c )) − 1 2 ψ c 2 max c , L R Civilians choose which sector to work in p Y F ( T Y , L Y ) + w ( L − L C ( c ) − L Y ) max L Y
Introduction Baseline Model Full Model Conclusion Monopoly over violence Equilibrium Figure: Wage rate endogenously determined by the level of employment, L ∗ R , where the marginal value products of labour are equalised. Armed groups coerce until it is cheaper to employ.
Introduction Baseline Model Full Model Conclusion Monopoly over violence Results Coercion increases with w , which increases when: Labour is scarce e.g. Domar (1970), Fenske (2012), Austin(2005)
Introduction Baseline Model Full Model Conclusion Monopoly over violence Results Coercion increases with w , which increases when: Labour is scarce e.g. Domar (1970), Fenske (2012), Austin(2005) Price of either resource of yeoman good increases. E.g. Coercion increased with price of rubber in the Congo Free State
Introduction Baseline Model Full Model Conclusion Monopoly over violence Results Coercion increases with w , which increases when: Labour is scarce e.g. Domar (1970), Fenske (2012), Austin(2005) Price of either resource of yeoman good increases. E.g. Coercion increased with price of rubber in the Congo Free State Production is labour intensive
Introduction Baseline Model Full Model Conclusion Many Armed Groups Many armed groups n armed groups, decide between conflict and coercion L i , c i , f i p R G ( π ( f i , f − i ) · T R , L i R ) − w ( L i max R − L C ( c i )) Contest function determines share of land that each armed group receives: � � f i π ( f i , f − i ) = ∑ f j
Introduction Baseline Model Full Model Conclusion Many armed groups Equilibrium Cost of coercion is opportunity cost of not fighting. w − κ ( c ∗ i ) · r = 0 (1) In equilibrium � n − 1 � � r � C ∗ = s − T R (2) n w Coercion depends both on ratio of factor prices and number of armed groups.
Introduction Baseline Model Full Model Conclusion Many armed groups Results Coercion, surprisingly, now decreases with the resource price if there are many armed groups. ↑ p R ↑ L ∗ = ⇒ R = ⇒ ↑ MRP T and ↓ MRP L � r � = ⇒ ↑ w ↓ C ∗ = ⇒
Introduction Baseline Model Full Model Conclusion Many armed groups Results Higher levels of coercion, if fewer armed groups, or military power centralised in one armed group. Intuition: oligopolist producers of violence: Groups would prefer that no-one fights, since can allocate all resources to coercion.
Introduction Baseline Model Full Model Conclusion Many armed groups Results Higher levels of coercion, if fewer armed groups, or military power centralised in one armed group. Intuition: oligopolist producers of violence: Groups would prefer that no-one fights, since can allocate all resources to coercion. If one group fights, then fighting is less effective for other groups: need to fight more to gain the same share of land.
Introduction Baseline Model Full Model Conclusion Many armed groups Results Higher levels of coercion, if fewer armed groups, or military power centralised in one armed group. Intuition: oligopolist producers of violence: Groups would prefer that no-one fights, since can allocate all resources to coercion. If one group fights, then fighting is less effective for other groups: need to fight more to gain the same share of land. Fighting of one group thus creates "negative externality" of fighting to other groups.
Introduction Baseline Model Full Model Conclusion Many armed groups Results Higher levels of coercion, if fewer armed groups, or military power centralised in one armed group. Intuition: oligopolist producers of violence: Groups would prefer that no-one fights, since can allocate all resources to coercion. If one group fights, then fighting is less effective for other groups: need to fight more to gain the same share of land. Fighting of one group thus creates "negative externality" of fighting to other groups. Larger armed group has more "market power" in use of violence: larger impact on total level of fighting, therefore fights less.
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