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Social Composition, Social Conflict, and Economic Development

  • Holger Strulik

    (Department of Economics, University of Copenhagen)

This paper investigates how social composition affects social conflict and economic development when property rights are unenforceable. Groups follow Markovian strategies for consumption and investment and may also spend effort in an resource appropriation contest. It is shown that conflict prevents investment and growth in a society of symmetric groups. 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. The rebelridden economy either stagnates or grows at a low rate. Growth is decreasing in the size of the predatory minority and its conflict intensity. A final part extends the analysis towards behavior of non-benevolent social elites.

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File URL: http://www.econ.ku.dk/english/research/publications/wp/2005/0516.pdf/
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Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 05-16.

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Length: 23 pages
Date of creation: Sep 2005
Date of revision:
Handle: RePEc:kud:kuiedp:0516
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