Warlord Competition

Published date01 July 2002
Date01 July 2002
Subject MatterArticles
From the earliest recorded wars in history to
the present, conf‌lict has been taking place
between hierarchically organized groups
with emperors, kings, lords, or generals at
the top and common foot soldiers at the
bottom. Nowadays, in many countries from
Colombia, to Somalia, to the northern parts
of Afghanistan, broad swaths of territory are
outside the effective control of central
governments – if those exist at all – and
contested by rival groups, typically headed
by what we could fairly characterize as war-
lords. By linguistic convention, such conf‌lict
constitutes competition, and that com-
petition has at least some economic objec-
tives. Evaluating conf‌lict as competition
from an economic perspective is not a
simple matter, however, for we cannot
blindly apply the received economic models
without running into problems. Is a greater
number of competitors, for example, a good
thing when there is conf‌lict, as it is taken to
be in the case of ordinary competing busi-
ness f‌irms? With more competitors, we
would expect more f‌ighting and resource
waste, less predictability, and greater diff‌i-
culties in communication, negotiation, and
settlement. Therefore, intuitively at least,
it appears that the answer to the question
© 2002 Journal of Peace Research,
vol. 39, no. 4, 2002, pp. 435–446
Sage Publications (London, Thousand Oaks,
CA and New Delhi)
[0022-3433(200207)39:4; 435–446; 025822]
Warlord Competition*
Department of Economics, University of California, Irvine
Warlords compete for turf that provides them with rents and ‘taxable’ resources, but they can also offer
a semblance of security within their respective territories. This article f‌irst examines two economic
models of warlord competition. Because such competition takes place through the use of force or the
threat of the use of force, more competition typically leads to lower material welfare as resources are
wasted on unproductive arming and f‌ighting. This is in contrast to ordinary economic models, in which
typically greater competition leads to higher material welfare. Furthermore, rents from oil, diamonds,
and even foreign aid crowd out production. In extreme cases, this crowding out of ordinary produc-
tion can be complete, whereby all economic resources can be devoted to the unproductive competition
for rents. The article then reviews factors that lead either to actual war or to peace in the shadow of
war. Because war is destructive, human beings are typically risk averse, and there exist numerous com-
plementarities in production and consumption, we can expect peace in the shadow of war to be most
often preferable by all parties. Actual war can take place because of incomplete information about the
preferences and capabilities of the adversaries but also, somewhat surprisingly, when the shadow of the
future is suff‌iciently long.
* Presented at the workshop on ‘Why Some Countries
Avoid Conf‌lict While Others Fail’; held at, and sponsored
by, the World Institute for Development Economics
Research (WIDER), United Nations University, Helsinki,
20–21 October 2000. I would like to thank Halvor
Mehlum, Mansoob Murshed, other workshop participants,
and three referees for their helpful comments. I also thank
WIDER for its f‌inancial support.
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