WIDER Discussion Papers // World Institute for Development Economics (UNU-WIDER) 2001/46
A simple two-stage game-theoretic model of conflict is analysed, where the government can send raiders for terrorising the population to flee before the fighting proper begins. The resulting displacement of population reduces the efficiency of the guerrilla in the fight against the government. Conditions are spelled out for a sub-game perfect equilibrium to exist where terror substitutes for fighting, when the government can afford it. The model’s predictions are tested using data on refugees in Africa, showing that, after controlling for war, ODA has a positive impact on the outflow of refugees, as predicted.