This paper discusses how endogenous mechanisms linking processes of violent conflict and the economic wellbeing of individuals and households in combat areas provide valuable micro foundations to the ongoing debate on the causes and duration of armed conflict.
Notably, the endogenous relationship between conflict processes and household economic status leads to the emergence of symbiotic associations between armed groups and households living in areas they control that affect substantially the probability of a conflict starting and its effectiveness thereafter.
Households in conflict areas draw on local armed groups to protect their economic status when anticipating violence and during the conflict, while armed groups make use of different levels of (either reluctant or voluntary) participation, support and cooperation from local populations to advance their strategic objectives at the onset and throughout the conflict.
The level of household participation at the start and during the conflict is a function of two interdependent variables, namely household vulnerability to poverty and household vulnerability to violence. The poorer the household is at the start of the conflict, the higher is the probability of the household participating and supporting an armed group.
The higher the risk of violence, the higher is the probability of the household participating and supporting armed groups. The interaction between these two variables varies with the conflict itself and is defined by the direct and indirect effects of conflict-induced violence on the economic behaviour and decisions of households in combat areas.