Abstract
The Sri Lankan ethnic conflict has imposed substantial costs on the Sri Lankan people. All ethnic groups are either directly or indirectly affected by the conflict. Two main parties of the conflict, the Sri Lankan government and the Liberation Tigers of Tamil Eelam (LTTE), signed a ceasefire agreement (CFA) in 2002 and began peace talks for a negotiated settlement. Despite recent peace talk setbacks and reports on massive CFA violations, both parties repeatedly state their commitment to a peaceful solution. This paper offers a strategic analysis of the Sri Lankan conflict by applying an economic tool, in order to determine the type of political structure most likely to work as a resolution, given the present environment, the power of the parties and their current objectives. An attempt is made to obtain probability statements for a set of political solutions, and to provide an interpretation of their numerical values.
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