Inequality and conflict: Burning resources to support peace

摘要

We consider a simple, guns-versus-butter model in which agents choose between "war"and "peace"to study the implications of inequality in resource ownership for equilibrium outcomes. Provided war is destructive, peace can emerge as the stable equilibrium, but only if the distribution of resource ownership is sufficiently even. We establish that, when this condition fails, the richer agent can destroy a portion of its resource endowment to even out the ex post distribution and thereby support peace. We also examine the importance of ex ante resource transfers and show that they are Pareto superior to burning resources. (C) 2020 Elsevier B.V. All rights reserved.