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Bethany DONITHORN
on Mon, October 29, 2012 at 07.33 pm

Land Inequality & Conflict Onset: Cooperative Game Theoretic Implications for Economic Policy - McDougal & Ferguson

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*Accepted under the "Addressing Inequalities" Global Thematic Consultation - Call for Proposals for Background Papers, Oct 2012*

Topher L. MCDOUGAL a,b
 
Neil T. FERGUSON c

a Kroc School of Peace Studies, University of San Diego, USA
b Centre on Conflict, Development & Peacebuilding, Graduate Institute of International & Development Studies, Geneva
c German Institute for Economic Research (DIW), Berlin

October 2012
 

Abstract: Land inequalities have been cited as the root cause of violent conflict in diverse developing countries from Burundi to Nicaragua to rural India. In an era that has been dubbed “the End of Cheap Food,” such inequalities represent an increasingly salient risk. In this conceptual paper, we employ the underutilized lens of cooperative game theory to understand when maintaining equality in property rights (via land redistribution or other means) is most crucial to guarantee peace. In our model, we assess the potential for cooperative institutional structures to emerge in a hypothetical 3-sector economy (industry, high-productivity agriculture, and low-productivity agriculture). We show that in the usual case of decreasing returns to scale, land inequality exhibits an inverted U-shaped relationship to conflict onset, and that the potential for a cooperative economy may be enhanced by reducing technological disparities between high- and low-productivity agriculture. We show that in extreme cases of negative returns to scale, different relationships between land inequality and conflict onset may emerge. We conclude with policy implications of the findings, and suggestions for testing the model.

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