A theory of post-civil war democratization

We model the transition from a chaotic status quo to a more orderly political regime as a two-stage game involving two warring factions and the citizens. The warring factions move first and decide the form of government by (1) inviting an external arbitrator, (2) choosing the people as arbitrator, i.e. democratizing or (3) maintaining the status quo. We analyze the conditions under which democracy is likely to emerge as the outcome of the game. We show that citizens prefer democracy because it generates a sociopolitical order that protects them against 'banditry' and expropriation. Because the citizens' actions generate positive externalities, incentives for democratization are generated in part by the fact that protection against expropriation under democracy also indirectly benefits the warring factions.