Social composition, social conflict and economic development*


  • *

    I thank Ines Lindner, Oded Galor, Nikolaus Siegfried, participants of research seminars at Hamburg, Groningen, Muenster and Zuerich Universities, Hebrew University, at EPRU, Copenhagen, participants of the Annual Conferences of the German Economic Association and of the European Economic Association, the editor, Andrew Scott, and three anonymous referees for useful comments.


This article investigates how the existence of non-cooperative social groups that appropriate resources either peacefully or through contest affects economic growth when property rights are unenforceable. For symmetric groups it shows that economic growth is generated only in peaceful societies. For the case of asymmetric groups rebel-equilibria are investigated in which a large majority behaves peacefully although challenged by an aggressive minority. The article explains how conflict intensity and the rate of economic growth depend on social fractionalisation, general productivity of the economy, power of social elites and the ease at which resources are appropriated.