A Model of Spoils Politics


  • A previous version of this article circulated under the title “Conflict and Compromise in Hard and Turbulent Times.” For helpful comments, criticisms, and discussion, we thank Daron Acemoglu, Pedro Dal Bó, Thad Dunning, Gene Grossman, Robert Keohane, Daniel Mejia, Meg Meyer, Edward Miguel, John Morgan, and James Robinson.

Ernesto Dal Bó is associate professor, Business and Public Policy Group, Haas School of Business, 545 Student Services #1900, 2220 Piedmont Avenue, University of California at Berkeley, Berkeley, CA 94720-1900 (dalbo@haas.berkeley.edu). Robert Powell is Robson Professor, Travers Department of Political Science, 210 Barrows Hall, MC#1950, University of California at Berkeley, Berkeley, CA 94720-1950.


Accounts of state failure in the developing world frequently highlight a logic of “spoils politics” in which a government and an opposing faction vie for control of the state and the accompanying spoils. Attempts to buy the opposition off play a key role in this logic, and an informational problem often complicates these efforts. Because of limited transparancy, the government generally has a better idea about the actual size of the spoils than the opposition does. We formalize this aspect of spoils politics as a signaling game in which the government has private information about the size of the spoils and tries to co-opt the opposition by offering a share of the spoils. The opposition can accept the offer or reject it by fighting. Consistent with the strong empirical finding that the probability of civil war is higher when income is low, the probability of breakdown increases as the size of the spoils decreases. We also study the effects of uncertainty, the opposition's military strength, the cost of fighting, and power-sharing agreements on the probability of fighting.