Economic conflict: Does the political process lead to hawkishness?
Speaker: Siddhartha Bandyopadhyay (University of Birmingham)
This seminar is hosted by Andrew Pickering.
We analyze conflict between two groups over a fixed resource such as land which has economic value. One group has an elected leader who proposes a division such that, the lower the amount of resources ceded to the insurgents, the higher the cost of conflict. Leaders differ in ability and ideology such that the higher the leader's ability, the lower the cost of conflict, and the more hawkish the leader, the higher his utility from retaining more of the resource. We show that the conflict arises from re-election motives causing leaders to choose to cede too little of the resource to signal their ability. We also show that when the rents of office are high, the political equilibrium and the second best diverge; in particular, the policy under the political equilibrium is more hawkish compared to the second best. When both ideology and ability are unknown, we provide a plausible condition under which the probability of re-election increases in the leader's hawkishness. This provides an explanation for why hawkish politicians may have a natural advantage under the electoral process. We extend the model to show that if conflict has an ideological component ie over a resource that has no economic value, either excessive hawkishness or excessive dovishness may occur in equilibrium.