Inequality and conflict: Burning resources to support peace

Michelle Garfinkel and Constantinos Syropoulos ()

Economics Letters, 2020, vol. 197, issue C

Abstract: We consider a simple, guns-versus-butter model in which agents choose between “war” and “peace” to study the implications of inequality in resource ownership for equilibrium outcomes. Provided war is destructive, peace can emerge as the stable equilibrium, but only if the distribution of resource ownership is sufficiently even. We establish that, when this condition fails, the richer agent can destroy a portion of its resource endowment to even out the ex post distribution and thereby support peace. We also examine the importance of ex ante resource transfers and show that they are Pareto superior to burning resources.

Keywords: Disputes; Output insecurity; Arming; Destructive wars; Stable peace (search for similar items in EconPapers)
JEL-codes: D30 D74 F51 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:197:y:2020:i:c:s016517652030361x

DOI: 10.1016/j.econlet.2020.109601

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