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Unpublished Paper
A Model of Conflict, Appropriation and Production in a two-sector economy
(2007)
  • Raul Caruso
Abstract

This paper presents a two-sector economy. In a contested sector two agents struggle to appropriate the maximum possible fraction of a contestable output. In an uncontested sector, they hold secure property rights over the production of some goods. Agents split their resource endowment between ‘butter’, ‘guns’ and ‘ice-cream’. The latter denote productive activities secure from appropriation. It is shown how improvements in productivity can countervail destructive impact of continuous conflicts. Eventually a basic model is extended to consider a government and a rival group. A redistributive government can boost production in the uncontested sector, but at a higher level of ‘guns’.

Keywords
  • conflict,
  • productive and unproductive activities,
  • butter and guns,
  • crime,
  • warlord
Disciplines
Publication Date
September, 2007
Citation Information
Raul Caruso. "A Model of Conflict, Appropriation and Production in a two-sector economy" (2007)
Available at: http://works.bepress.com/raul_caruso/13/