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Between-Group Contests over Group-Specific Public Goods with Within-Group Fragmentation

Author

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  • Dasgupta, Indraneel

    () (Indian Statistical Institute)

  • Neogi, Ranajoy Guha

    (Indian Statistical Institute)

Abstract

We model a contest between two groups of equal population size over the division of a group-specific public good. Each group is fragmented into sub-groups. Each sub-group allocates effort between production and contestation. There is perfect coordination within sub-groups, but sub-groups cannot coordinate with one another. All sub-groups choose effort allocations simultaneously. We find that aggregate rent-seeking rises, social welfare falls, and both communities are worse off when the dominant sub-groups within both communities increase their population shares relative to the respective average sub-group population. Any unilateral increase in fragmentation within a group reduces conflict and makes its opponent better off. The fragmenting community itself may however be better off as well, even though its share of the public good falls. Thus, a reduced share of public good provisioning cannot be used to infer a negative welfare implication for the losing community.

Suggested Citation

  • Dasgupta, Indraneel & Neogi, Ranajoy Guha, 2017. "Between-Group Contests over Group-Specific Public Goods with Within-Group Fragmentation," IZA Discussion Papers 10881, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10881
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    References listed on IDEAS

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    5. Jay Pil Choi & Subhasish M. Chowdhury & Jaesoo Kim, 2011. "Group Contests with Internal Conflict and Power Asymmetry," University of East Anglia Applied and Financial Economics Working Paper Series 025, School of Economics, University of East Anglia, Norwich, UK..
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    More about this item

    Keywords

    contest; group-specific public good; local public good; ethnic conflict; within-group fragmentation;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General

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