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Inequality and conflict: Burning resources to support peace

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  • Garfinkel, Michelle R.
  • Syropoulos, Constantinos

Abstract

We consider a simple, guns-versus-butter model in which agents choose between “war” and “peace” to study the implications of inequality in resource ownership for equilibrium outcomes. Provided war is destructive, peace can emerge as the stable equilibrium, but only if the distribution of resource ownership is sufficiently even. We establish that, when this condition fails, the richer agent can destroy a portion of its resource endowment to even out the ex post distribution and thereby support peace. We also examine the importance of ex ante resource transfers and show that they are Pareto superior to burning resources.

Suggested Citation

  • Garfinkel, Michelle R. & Syropoulos, Constantinos, 2020. "Inequality and conflict: Burning resources to support peace," Economics Letters, Elsevier, vol. 197(C).
    • Handle: RePEc:eee:ecolet:v:197:y:2020:i:c:s016517652030361x
    DOI: 10.1016/j.econlet.2020.109601
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    References listed on IDEAS

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    1. Fearon, James D., 1995. "Rationalist explanations for war," International Organization, Cambridge University Press, vol. 49(3), pages 379-414, July.
    2. Garfinkel, Michelle R. & Syropoulos, Constantinos, 2021. "Self-enforcing peace agreements that preserve the status quo," Games and Economic Behavior, Elsevier, vol. 130(C), pages 148-178.
    3. Anbarci, Nejat & Skaperdas, Stergios & Syropoulos, Constantinos, 2002. "Comparing Bargaining Solutions in the Shadow of Conflict: How Norms against Threats Can Have Real Effects," Journal of Economic Theory, Elsevier, vol. 106(1), pages 1-16, September.
    4. Matthew O. Jackson & Massimo Morelli, 2007. "Political Bias and War," American Economic Review, American Economic Association, vol. 97(4), pages 1353-1373, September.
      • Jackson, Matthew O. & Morelli, Massimo, "undated". "Political bias and war," Working Papers 1247, California Institute of Technology, Division of the Humanities and Social Sciences.
    5. Vincenzo Bove & Ron Smith, 2011. "The Economics of Peacekeeping," Chapters, in: Derek L. Braddon & Keith Hartley (ed.), Handbook on the Economics of Conflict, chapter 10, Edward Elgar Publishing.
    6. Derek L. Braddon & Keith Hartley (ed.), 2011. "Handbook on the Economics of Conflict," Books, Edward Elgar Publishing, number 13624.
    7. Giacomo De Luca & Petros G. Sekeris, 2013. "Deterrence in Contests," Economica, London School of Economics and Political Science, vol. 80(317), pages 171-189, January.
    8. Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June.
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    Cited by:

    1. Garfinkel, Michelle R. & Syropoulos, Constantinos, 2021. "Self-enforcing peace agreements that preserve the status quo," Games and Economic Behavior, Elsevier, vol. 130(C), pages 148-178.
    2. Simon Varaine & Raul Magni-Berton & Ismaël Benslimane & Paolo Crosetto, 2022. "Egoism and altruism in intergroup conflict," Working Papers 2022-04, Grenoble Applied Economics Laboratory (GAEL).

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    More about this item

    Keywords

    Disputes; Output insecurity; Arming; Destructive wars; Stable peace;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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