This article applies mechanism design to the study of international conflict resolution. Standard mechanisms in which an arbitrator can enforce her decisions are usually not feasible because disputants are sovereign entities. Nevertheless, we find that this limitation is inconsequential. Despite only being capable of making unenforceable recommendations, mediators can be equally effective as arbitrators. By using recommendation strategies that do not reveal that one player is weak to a strong opponent, a mediator can effectively circumvent the unenforceability constraint. This is because these strategies make the strong player agree to recommendations that yield the same payoff as arbitration in expectation. This result relies on the capability of mediators to collect confidential information from the disputants, before making their recommendations. Simple protocols of unmediated communication cannot achieve the same level of ex ante welfare, as they preclude confidentiality.

We establish a theoretical and empirical framework to assess the role of resource endowments and their geographic location in interstate conflict. The main predictions of the theory are that conflict is more likely when at least one country has natural resources, when the resources in the resource-endowed country are closer to the border, and, in the case where both countries have natural resources, when the resources are located asymmetrically vis-à-vis the border. We test these predictions on a novel data set featuring oilfield distances from bilateral borders. The empirical analysis shows that the presence and location of oil are significant and quantitatively important predictors of interstate conflicts after World War II.

We provide a model of conflict and mass killing decisions to identify the key variables and situations that make mass killings more likely to occur. We predict that mass killings are most likely in countries with large amounts of natural resource rents, polarization, institutional constraints regarding rent sharing, and low productivity of labor. The role of resources such as oil, gas, and diamonds and other key determinants of mass killings is confirmed by our empirical results based on country-level as well as ethnic group–level analysis.