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Differentials in property Rights in a two-sector economy
Revue d'économie politique (2012)
  • Raul Caruso

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, the 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”.

  • property rights,
  • conflict,
  • productive and unproductive Activities,
  • Butter,
  • Guns and Ice-cream,
  • appropriation,
  • entrepreneurship,
  • redistribution,
  • kleptocracy
Publication Date
Spring 2012
Citation Information
Raul Caruso. "Differentials in property Rights in a two-sector economy" Revue d'économie politique Vol. 122 Iss. 2 (2012)
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