ON ECONOMIC CAUSES OF CIVIL-WAR

We investigate whether civil wars have economic causes. The model is b ased on utility theory, rebels will conduct a civil war if the perceiv ed benefits outweigh the costs of rebellion. Using probit and tobit mo dels the propositions are tested empirically. Four variables, initial income, ethno-linguistic fractionalisation, the amount of natural reso urces, and initial population size are significant and strong determin ants of the duration and the probability of civil wars. One important finding is that the relationship between civil wars and ethnic diversi ty is non-monotonic; highly fractionalised societies have no greater r isk of experiencing a civil war than homogenous ones.