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

Indraneel Dasgupta (indraneel@isical.ac.in) and Ranajoy Guha Neogi
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Ranajoy Guha Neogi: Indian Statistical Institute

No 10881, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: contest; group-specific public good; local public good; ethnic conflict; within-group fragmentation (search for similar items in EconPapers)
JEL-codes: D72 D74 O10 O20 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2017-07
New Economics Papers: this item is included in nep-cdm, nep-mic and nep-pol
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Published - published in: Public Choice, 2018, 174 (3-4), 315-334.

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Journal Article: Between-group contests over group-specific public goods with within-group fragmentation (2018)
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