BUTTER, GUNS AND ICE‐CREAM THEORY AND EVIDENCE FROM SUB‐SAHARAN AFRICA

Abstract

This paper is intended to complement the existing literature on civil wars. First, it presents a simple theoretical model of conflict that defines a two‐sector economy. In a contested sector, two agents struggle to appropriate the maximum possible fraction of a contestable output. In an uncontested sector, they hold secure property rights over the production of some goods. Agents split their resource endowment between ‘butter’, ‘guns’ and ‘ice‐cream’. Following the theoretical insights the empirical analysis focuses on the relationship between civil wars and different sectors of the economy. In particular, a panel probit specification shows that the incidence of a civil war decreases in the size of manufacturing sector.

Keywords:

• Civil war
• Resource curse
• Butter, guns and ice‐cream
• Structure of the economy
• Panel probit analysis

JEL Codes:

• D74
• O13
• H56

ACKNOWLEDGEMENTS

The author wants to thank two anonymous referees for their valuable comments and suggestions. The author also warmly thanks Damien Hazell for his support.

Notes

¹ See among others: Collier and Hoeffler (1998, 2004), Le Billon (2001a), De Soysa (2002), Sambanis (2001, 2002), Bannon and Collier (2003), Fearon and Laitin (2003), Fearon (2005), Humphreys (2005), Lujala et al. (2005), De Soysa and Neumayer (2007), Collier and Rohner (2008), Miguel et al. (2004), Ross (2007).

² In more recent years several studies extended Hirshleifer basic model. See among others: Grossman (1991), Skaperdas (1992), Grossman and Kim (1995), Skaperdas and Syropoulos (1996), Neary (1997), Anderton et al. (1999), Noh (1999), Garfinkel (2004), Dixit (2004), Caruso (2006, 2007), Hausken (2004, 2006), Munster (2007). The literature on the economics of conflict has been recently surveyed in Garfinkel and Skaperdas (2007).

³ See Skaperdas (1996) for an axiomatization.

⁴ The dataset is available at http://www.prio.no/CSCW/Datasets/Armed-Conflict/UCDP-PRIO/ (accessed January 2009). The dataset is described in Gleditsch et al. (2002).

⁵ Data on ethnic and religious fractionalization and polarization are available at http://www.econ.upf.edu/~reynal/data_web.htm (accessed January 2009).