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Differentials in property Rights in a two-sector economy

  • Raul Caruso

This paper presents a two-sector economy. In a contested sector two agents struggle to appropriate the maximum possible fraction of a contestable output. In an uncontested sector, they hold secure property rights over the production of some goods. Agents split their resource endowment between ?butter?, ?guns? and ?ice-cream?. The latter denote productive activities secure from appropriation. It is shown how improvements in productivity can countervail destructive impact of continuous conflicts. Eventually, the basic model is extended to consider a government and a rival group. A redistributive government can boost production in the uncontested sector, but at a higher level of ?guns?.

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Article provided by Dalloz in its journal Revue d'économie politique.

Volume (Year): 122 (2012)
Issue (Month): 2 ()
Pages: 257-278

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Handle: RePEc:cai:repdal:redp_218_0257
Contact details of provider: Web page: http://www.cairn.info/revue-d-economie-politique.htm

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  1. De Luca, Giacomo & Sekeris, Petros, 2009. "Land Inequality and Conflict Intensity," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 5, Verein für Socialpolitik, Research Committee Development Economics.
  2. Raul Caruso, 2010. "Butter, Guns And Ice-Cream Theory And Evidence From Sub-Saharan Africa," Defence and Peace Economics, Taylor & Francis Journals, vol. 21(3), pages 269-283.
  3. Christian Riis & Derek J. Clark, 1997. "Contest success functions: an extension," Economic Theory, Springer, vol. 11(1), pages 201-204.
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  7. Michelle R. Garfinkel & Stergios Skaperdas & Constantinos Syropoulos, 2006. "Globalization and Domestic Conflict," Working Papers 050601, University of California-Irvine, Department of Economics.
  8. Anderton, Charles H & Anderton, Roxane A & Carter, John R, 1999. "Economic Activity in the Shadow of Conflict," Economic Inquiry, Western Economic Association International, vol. 37(1), pages 166-79, January.
  9. Torvik, Ragnar, 2002. "Natural resources, rent seeking and welfare," Journal of Development Economics, Elsevier, vol. 67(2), pages 455-470, April.
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  11. Raul Caruso, 2004. "A Trade Institution as a Peaceful Institution?," Others 0406003, EconWPA, revised 15 Dec 2004.
  12. James E. Anderson & Douglas Marcouiller, S.J., 1999. "Insecurity and the Pattern of Trade: An Empirical Investigation," Boston College Working Papers in Economics 418, Boston College Department of Economics, revised 03 Aug 2000.
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  14. Kjell Hausken, 2006. "The Stability Of Anarchy And Breakdown Of Production," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(6), pages 589-603.
  15. Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1275-88, December.
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  17. Magnus Hoffmann, 2010. "Enforcement of property rights in a barter economy," Social Choice and Welfare, Springer, vol. 34(2), pages 249-263, February.
  18. Caruso, Raul, 2007. "Continuing Conflict and Stalemate: A Note," MPRA Paper 2316, University Library of Munich, Germany.
  19. repec:ebl:ecbull:v:4:y:2007:i:17:p:1-8 is not listed on IDEAS
  20. Matthew J. Baker, 2003. "An Equilibrium Conflict Model of Land Tenure in Hunter-Gatherer Societies," Journal of Political Economy, University of Chicago Press, vol. 111(1), pages 124-173, February.
  21. Michelle R. Garfinkel, 2004. "On the Stability of Group Formation: Managing the Conflict Within," Conflict Management and Peace Science, Peace Science Society (International), vol. 21(1), pages 43-68, February.
  22. Kjell Hausken, 2004. "Mutual Raiding of Production and the Emergence of Exchange," Economic Inquiry, Western Economic Association International, vol. 42(4), pages 572-586, October.
  23. Baumol, William J, 1990. "Entrepreneurship: Productive, Unproductive, and Destructive," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 893-921, October.
  24. Baland, Jean-Marie & Francois, Patrick, 2000. "Rent-seeking and resource booms," Journal of Development Economics, Elsevier, vol. 61(2), pages 527-542, April.
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