Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/227290 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13763
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We examine how cross-community cost or benefit spillovers, arising from the consumption of group-specific public goods, affect both inter-group conflicts over the appropriation of such goods and decentralized private provision for their production. Our model integrates production versus appropriation choices, vis-à-vis group-specific public goods, with their decentralized voluntary supply, against a backdrop of such cross-community consumption spillovers. Our flexible and general formulation of consumption spillovers incorporates earlier specifications as alternative special cases. We show that stronger negative (or weaker positive) consumption spillovers across communities may reduce inter-group conflict and increase aggregate income (and consumption) in society under certain conditions. Thus, stronger negative consumption spillovers may have socially beneficial consequences. We also identify conditions under which their impact will be both conflict-augmenting and income-compressing. Our general theoretical analysis offers a conceptual structure within which to organize investigation of feedback loops linking ethnic conflict and natural resource degradation in developing country contexts.
Subjects: 
public good contest
natural resource conflict
production versus appropriation
public bad
rent-seeking
JEL: 
D72
D74
O10
O20
Document Type: 
Working Paper

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