Inequality and conflict: Burning resources to support peace

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 ow...

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Bibliographic Details
Published inEconomics letters Vol. 197; p. 109601
Main Authors Garfinkel, Michelle R., Syropoulos, Constantinos
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.12.2020
Elsevier Science Ltd
Subjects
Arming
Butter
Destructive wars
Disputes
Equilibrium
Inequality
Output insecurity
Ownership
Pareto optimum
Peace
Stable peace
D30
D74
Destructive wars
Stable peace
Arming
F51
Disputes
Output insecurity
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Summary: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. •We study a single-period guns-vs-butter model of conflict between two agents.•The agents can choose either war or peace identified with the status quo.•Peace is more likely to emerge when resources are more evenly distributed.•Resource burning can promote peace, but is dominated by resource transfers.
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2020.109601