Civil War and the Social Contract

In this contract-theoretic modelthe government promises a transfer to itspotential opponent in return for notengaging in a civil war. Two causes ofcivil war are identified: (i) imperfectcredibility increases the cost of therequired transfer, and may make itunfeasible; (ii) asymmetric informationfaces the government with the classicefficiency/rent-extraction trade off, andcivil war is used as a screening device.This problem can be solved by creating amixed army. The model determines whether amilitary regime or a redistributive stateprevails in a peaceful equilibrium. Astatistical illustration is presented,using African data.