Political Stability Under Uncertainty: Applying Bounded Rationality to the Study of Governance and Civil Conflict

Abstract

Acentral puzzle in the comparative politics literature has been why certain societies are able to achieve political stability while others suffer from strife, repression and authoritarian rule. This article applies the solution concept of quantal response equilibrium (QRE) to Weingast's Sovereign-Constituency Co-ordination Game in order to show how our understanding of political stability can be enhanced when uncertainty and limited rationality are explicitly modelled. Comparative statics results first confirm the intuitive logic that civil conflict is unlikely when regimes threaten penalties for revolt that are much more severe than current living conditions and when the benefits to a successful revolt are not sufficiently enticing. In addition, our analysis provides a logic for the outbreak of civil conflict, noting that it is most likely when key payoffs are in their intermediate regions and far from critical ‘thresholds’, resulting in ambiguous and counterintuitive decision making by leaders and citizen opposition groups.