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Economic Theory

, Volume 68, Issue 2, pp 421–460 | Cite as

The paradox of power revisited: internal and external conflict

  • Ivan Lopez Cruz
  • Gustavo TorrensEmail author
Research Article

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.

Keywords

Paradox of power Internal and external conflict 

JEL Classification

D74 F50 

Supplementary material

199_2018_1130_MOESM1_ESM.pdf (1.3 mb)
Supplementary material 1 (pdf 1328 KB)

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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Sabanci UniversityIstanbulTurkey
  2. 2.Indiana UniversityBloomingtonUSA

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