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Social Composition, Social Conflict, and Economic Development

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  • Holger Strulik

Abstract

This paper investigates how people subdivided in social groups behave in an economy without property rights. Facing a linear production technology groups follow Markovian strategies for consumption and investment. Additionally, they may spend effort in an appropriation contest. For a symmetric society I show that conflict prevents investment and growth. In a society at peace economic growth may occur. Growth, however, is decreasing in the degree of social fractionalization and smaller than it could be under secure property rights. In an economy populated by social groups of unequal size an asymmetric equilibrium exists. A large majority may behave peacefully although continuously challenged by a predatory minority. In that case the economy either stagnates or grows at a low rate. Growth is decreasing in the size of the predatory minority and its conflict intensity.

Suggested Citation

  • Holger Strulik, 2004. "Social Composition, Social Conflict, and Economic Development," DEGIT Conference Papers c009_018, DEGIT, Dynamics, Economic Growth, and International Trade.
  • Handle: RePEc:deg:conpap:c009_018
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    3. Rohner, Dominic, 2011. "Reputation, group structure and social tensions," Journal of Development Economics, Elsevier, vol. 96(2), pages 188-199, November.
    4. John Smith, 2012. "Reputation, Social Identity and Social Conflict," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(4), pages 677-709, August.
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    6. 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.
    7. Matteo Cervellati & Piergiuseppe Fortunato & Uwe Sunde, 2008. "Hobbes to Rousseau: Inequality, Institutions and Development," Economic Journal, Royal Economic Society, vol. 118(531), pages 1354-1384, August.
    8. Schäfer, Andreas & Steger, Thomas, 2013. "Distributional conflict in small open economies," Research in Economics, Elsevier, vol. 67(4), pages 355-367.
    9. Leonardo Vera, 2013. "Some Useful Concepts for Development Economics in the Tradition of Latin American Structuralism," American Journal of Economics and Sociology, Wiley Blackwell, vol. 72(4), pages 917-948, October.
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    More about this item

    Keywords

    Africa’s Growth Tragedy; Property Rights; Social Conflict; Fractionalization;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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