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This paper develops a bargaining model that explains why political power-sharing agreements lead to peaceful resolution of civil wars between governments and insurgents in some cases, but not others. The model predicts that if the civil war ends in a military stalemate, the government uses its offer of a political power-sharing agreement to the insurgents as a tool to misrepresent private information about its military capacity and defeat the insurgency. This exacerbates commitment problems, increases the degree of support that insurgent leaders receive from their civilian supporters and consequently increases the likelihood of recurrence of civil war. Conversely, the model shows that when the war ends in a decisive military victory for the government or the insurgents, the offer of a political power-sharing agreement reduces the degree of support that insurgent leaders get from their civilian supporters and increases the costs of fighting for the insurgents. Hence, after a decisive military victory insurgents have incentives to accept the political power-sharing agreement and not revert to fighting. Results from Cox Proportional Hazard models estimated on a data set of 111 civil wars (1944–1999) provide robust statistical support for the model's predictions.
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