BREAD Working Paper No. 165, February 2008

Mutual Fear and Civil War

Sylvain Chassang, Gerard Padro i Miquel


We propose a theory of conflict in which actors balance the opportunity costs of fighting with the fear of being attacked. By mobilizing, an agent foregoes returns to her peacetime economic activity, but she can seize resources and protect herself from an attack. Opportunity costs change with the economic situation, which determines the risk of attack in equilibrium. This theory makes two contributions. First, it predicts that conflict occurs after bad economic shocks. This is supported by the empirical literature on civil war and it is difficult to accommodate using existing models. Second, the theory generates conflict out of mutual fears. This is closely related to the literature on the security dilemma. The model allows for a systematic exploration of the theory in Jervis (1978) in a rational choice framework and it shows that aggressive and security seeking agents can be jointly understood as depending on transient economic circumstances.

Keywords: Global Games, Conflict, Civil War, Economic Shocks

JEL classification codes: D74, D82

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