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The Elgar Companion to Public Economics

Empirical Public Economics

Edited by Attiat F. Ott and Richard J. Cebula

Attiat Ott and Richard Cebula have recognised the need to present, in an accessible and straightforward way, the voluminous literature in the public economics arena. Advances in econometric techniques and the spillover of knowledge from other disciplines made it difficult, not only for students but also for lecturers, to accurately find the information they need.
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Chapter 10: Economics of Conflict

Keith Hartley


10 Economics of conflict Keith Hartley Introduction Conflict is usually the preserve of disciplines other than economics. Debates and decisions about war involve political, military, moral and legal judgements. But there is an economics dimension of conflict, namely, its costs. Wars are not costless: they can involve massive costs (for example the costs of World War II). Economics has also made further contributions in analysing the causes of conflict and in identifying potential economic targets during conflict (for example oil fields, aircraft factories and railways in World War II). Surprisingly, in view of the resource costs involved, there is not a massive economics literature studying World Wars I and II and other major conflicts since 1945 (for example Korea, Vietnam, Bosnia, Middle East, Iraq). Recent developments have focused on applying economic theory and modelling to conflict, including terrorism (for example rational choice models and game theory). These developments can help policy-makers understand the causes of different types of conflict and the role of policy solutions such as international agreements controlling arms races and arms exports, sanctions, deterrence and the contribution of international peace-keeping to preventing and resolving conflict. There remains a need for more empirical work on the economics of conflict. Much empirical work, including case studies of conflict, has been undertaken by scholars from other disciplines (for example history, political science, sociology). There is a surprising absence of applied economics studies of wars and conflicts. As a...

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