March 2007

IZA DP No. 2682: Rationality as a Barrier to Peace: Micro-Evidence from Kosovo

published in: Comparative Economic Studies, 51(2): 242-264, 2009

Despite a significant expansion of the literature on conflicts and fragility of states, only a few systematic attempts have been made to link the theoretical literature on social conflicts to the available micro-level information about the people who are involved in these conflicts. We address this lacuna in the literature using a household-level data set from Kosovo. Our analysis suggests that it is individually rational for competing ethnic communities, Kosovo Albanians and Kosovo Serbs, to resist a quick agreement on a social contract to share the region’s resources.