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Social Fractionalization, Endogenous Appropriation Norms, and Economic Development

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  • INES LINDNER
  • HOLGER STRULIK

Abstract

We investigate how social composition affects competitive and cooperative behaviour in a linear growth model without secure property rights. If a society is homogeneous or highly fractionalized, it is in the self‐interest of people to cooperate. The first‐best allocation is enforced through trigger strategies, and growth is independent from social structure. If a society is polarized, i.e. if it consists of a small number of groups, the first‐best solution can turn out to be unenforceable and groups will follow an exploitative strategy. In this case, the rate of growth is monotonously decreasing in the degree of fractionalization.

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  • Ines Lindner & Holger Strulik, 2008. "Social Fractionalization, Endogenous Appropriation Norms, and Economic Development," Economica, London School of Economics and Political Science, vol. 75(298), pages 244-258, May.
    • Handle: RePEc:bla:econom:v:75:y:2008:i:298:p:244-258
    DOI: 10.1111/j.1468-0335.2007.00614.x
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    Cited by:

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    3. Holger Strulik, 2008. "Social composition, social conflict and economic development," Economic Journal, Royal Economic Society, vol. 118(530), pages 1145-1170, July.
    4. Strulik, Holger, 2012. "The voracity effect revisited," Mathematical Social Sciences, Elsevier, vol. 64(3), pages 272-276.
    5. Bertrand Crettez & Naila Hayek & Lisa Morhaim, 2019. "Growth and Insecure Private Property of Capital," Dynamic Games and Applications, Springer, vol. 9(4), pages 1042-1060, December.
    6. Strulik, Holger, 2012. "Poverty, voracity, and growth," Journal of Development Economics, Elsevier, vol. 97(2), pages 396-403.
    7. Yohei Tenryu, 2017. "The role of the private sector under insecure property rights," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 64(3), pages 285-311, September.

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