Introduction: "With 135 ethnic groups divided into eight major national ethnic races,1 Myanmar2 is one of the most ethnically diverse countries in the world. The Panglong Agreement in 1947 tried to set the path for the integration of these nationals into one state. However, with the assassination of the architect of the Panglong Conference General Aung San and the subsequent military takeover of the country, the curtain of ethnic struggles was drawn. Among ethnic groups fighting for their self-adetermination is the Pa-O3. The research focused on the period from 1988 to 2012 because this is the period when most of the ceasefire agreements were signed, which allowed some forms of law and order to return to the local community. The research methodology is mainly qualitative, using. Yet, amid the chaos after the democracy movement in 1988, the military regime managed to sign over 20 ceasefire agreements with various armed groups, among them were with the Pa-O National Organization (PNO) and the Shan State Nationalit ies People?s Liberation Organization (SSNPLO). PNO agreed to ceasefire in 1991 and SSNPLO followed in 1994. Therefore, theoretically, the Pa-O area has been pacified since the 1990s. Indeed, the Pa-O populated region known as Area 6 was granted the status of Self Administrated Zone (SAZ) in 2011. This paper attempts to look into what ceasefire means to the Pa-O people from the perspective of the development of the political economy in the SAZ. Developing on the theory put forward by Mancur Olson (Olson, 2000) that a stationary bandit should provide better development prospects to the local people than a roving bandit, this paper argues that the benevolence of the stationary bandit is not given per se, it needs competition to bring it forward. Since signing the ceasefire agreement and receiving lucrative economic concessions from the central government, the PNO have effectively become a stationary bandit with an informal mandate to rule over the Pa-O area. In a way agreeing with Charles Tilly (Tilly, 1985) that the state is no different from the Mafia, in that they both tax their people in return for providing protection, Olson argued that a roving bandit will only concern about h is short-term gains whereas a stationary bandit will actually try to provide genuine development for the people in order to perpetuate the control over the area. Effectively, the PNO have become a stationary bandit after signing the ceasefire agreement, bu t whether they have performed their duties like Olson has predicted is the subject of this investigation...".....Paper delivered at the International Conference on Burma/Myanmar Studies: Burma/Myanmar in Transition: Connectivity, Changes and Challenges: University Academic Service Centre (UNISERV), Chiang Mai University, Thailand, 24-­26 July 2015.