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The paradox of power revisited: internal and external conflict

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  • Ivan Lopez Cruz

    (Sabanci University)

  • Gustavo Torrens

    (Indiana University)

Abstract

This paper develops a two-level model of internal and external conflict in which the paradox of power holds for internal conflict, but not for external conflict. In the model, internal conflict is imbedded in a situation of external conflict. Agents in a group fight over the distribution of resources within the group, but they cooperate to fight against other groups. Agents with low economic productivity have an advantage in the internal conflict game because they face a lower opportunity cost for investments in weapons. However, it is easier for more productive groups to mobilize resources for external conflict, and as a result they have an advantage over less productive groups. The model helps to explain why economically unproductive individuals may enjoy high living standards relative to more productive ones, but more developed groups usually defeat and conquer less developed ones. An extension of the model shows that groups with more unequal distribution of productivity might have an advantage in external conflict. The model can also be extended to study the effects of trade on the intensity of the paradox of power and income distribution within and across groups.

Suggested Citation

  • Ivan Lopez Cruz & Gustavo Torrens, 2019. "The paradox of power revisited: internal and external conflict," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 68(2), pages 421-460, September.
    • Handle: RePEc:spr:joecth:v:68:y:2019:i:2:d:10.1007_s00199-018-1130-z
    DOI: 10.1007/s00199-018-1130-z
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    4. Dripto Bakshi & Indraneel Dasgupta, 2021. "Internal vs. external rent-seeking with in-group inequality and public good provision," Discussion Papers 2021-06, University of Nottingham, CREDIT.

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    More about this item

    Keywords

    Paradox of power; Internal and external conflict;

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General

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