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Publications
Working Paper Series
The UBS Center has published two new
working papers since the last edition of
this newsletter. They offer current research
results on the U.S. employment sag of the
2000s and on the persistence of civil con-
flicts.
Working Paper No. 14, October 2015
Networks in Conflict: Theory and Evidence from the
Great War of Africa
Michael D. König, Dominic Rohner, Mathias Thoenig,
Fabrizio Zilibotti
Alliances and enmities among armed actors – be
they rooted in history or in mere tactical consid-
erations – are part of warfare. In many episodes,
including many recent in civil conflicts, they are
shallow links that are not sanctioned by formal trea-
ties or war declarations. Even allied groups retain
separate agendas and pursue self-interested goals
in competition with each other. The command of
armed forces remains decentralized, and coordina-
tion is minimal. Shallow and intransitive links are
also observed in international wars. For instance,
the anti-Nazi alliance between the Soviet Union and
the Anglo-Americans during World War II was a
tactical alliance to defeat a common enemy. Well
before the war was over, the Soviet Union and the
Anglo-Americans were fighting strategically for
conflicting objectives, each trying to secure the best
political and military post-war outcome. Under-
standing the role of informal networks of alliance
and enmities is important, not only for predicting
outcomes, but also for implementing policies to
contain or put an end to violence. Yet, with only
few exceptions, the existing political and economic
theories restrict attention to conflicts among a
small number of well-coordinated coalitions. In this
article, the authors construct a theory of conflict,
focusing explicitly on informal networks of alliances
and enmities, and apply it econometrically to the
study of the Second Congo War (1998–2003) and
its aftermath. The theory combines elements from
network theory and from the politico-economic
theory of conflict. The authors postulate a contest
success function augmented by an externality: each
group’s strength is increased by the fighting effort of
its allies, and weakened by the fighting effort of its
rivals. They obtain a closed form characterization
of the equilibrium that determines the intensity of
the conflict and of how the network structure affects
individual and total fighting efforts.
You can download the UBS Center Public Papers,
the Working Papers, and Factsheets (summaries
of the Working Papers) from our website anytime.
Print editions of the Public Papers and the Fact-
sheets can be ordered free of charge.
Working Paper No. 13, September 2015
Import Competition and the Great U.S. Employment
Sag of the 2000s
Daron Acemoglu, David Autor, David Dorn, Gordon H.
Hanson, Brendan Price
Even before the Great Recession, U.S. employment
growth was unimpressive. Between 2000 and 2007,
the economy gave back the considerable gains in
employment rates it had achieved during the 1990s,
with a historic contraction in manufacturing being
a prime contributor to the slump. The U.S. em-
ployment "sag" of the 2000s is widely recognized
but poorly understood. In this paper, the authors
explore the impact of the rising import competi-
tion from China on U.S. employment growth. They
find that the dramatic increase in U.S. imports from
China, which accelerated after 2000, was a major
force behind both recent reductions in U.S. manu-
facturing employment and – through input-output
linkages and other general equilibrium effects –
weak overall U.S. job growth. The authors conduct
an industry-level analysis to quantify the employ-
ment effects of import competition in differentially
exposed industries. By augmenting this setup with
data from the U.S. input-output table for 1992, they
are also able to estimate the employment impacts of
upstream and downstream import exposure for both
manufacturing and nonmanufacturing industries.
This approach thus allows capturing both the direct
effect of exposure to Chinese import competition
at the industry level, as well as the effects of indi-
rect exposure through supply chain linkages. As a
second empirical strategy, the authors analyze local
labor markets where the industry composition is
differentially exposed to trade. This strategy allows
capturing the employment effects of local general
equilibrium channels that could not be observed in
an industry-level analysis. Trade pressure appears
to have contributed to the U.S. employment sag not
just before, but also during the Great Recession.