Conflict and Mobility: Resource Sharing Among Groups

We study a political competition between two groups, where the winner has the decision rights to allocate resources, like political parties deciding on sharing of patronage goods. What factors determine how resources are shared? We highlight an important force that affects distribution of resources, namely the ability to move between groups. In many contexts, group sizes are determined endogenously. For example, allocation of jobs based on party allegiance may influence individuals’ choices of switching party membership. We analyze how the ease of inter-group mobility affects resource allocation. One insight from existing literature is that the threat of conflict can also act as a constraint to how exploitative the elite can be. We investigate the combined effect of both factors. We show how inter-group mobility affects the possibility of conflict and in turn the extent of resource sharing? We find that sharing occurs in equilibrium. There are two reasons why the incumbent wants to shares resources with the opposition. First, if the incumbent retains too much surplus, it may attract switchers, which reduces the per capita share. Second, sharing resources increases the oppositions opportunity cost of engaging in conflict. There are thus two constraints on expropriation the switching constraint and the conflict constraint. Optimal sharing is dictated by whether the constraint s bind. We also find a non-monotonic relationship between resource sharing and the cost of mobility. Our predictions are consistent with several stylized facts that cannot be explained by earlier models. JEL Code: D72, D74, D78 Email: [email protected] Email:[email protected] Email: [email protected] Se pt em be r 9 , 2 01 0