Conflict, Social Order, and Mutual Dependence on Production

• In Event: Political Transitions

Abstract

There is great variation in the degree to which distributions of coercive and economic power overlap across social groups and over time. Focusing on class, modern Western societies are characterized by a relatively low overlap between economic and coercive power distributions, with elites wielding greater economic power and the masses wielding greater coercive power. If we instead consider cleavages along racial, ethnic, or religious lines, the picture can be different. In the United States, distributions of both types of power by racial groups have been strongly correlated, with the white population wielding both significantly greater economic and coercive power compared to the black population. Many majority-minority relationships exhibit a similar pattern, from Uighurs and the Han Chinese in China to Irish and English in the British Empire. Other majority-minority relationships exhibit a relatively low overlap between economic and coercive power distributions. Examples include the Jewish and German populations in early 20th-century Germany, and Greeks and Turks in Ottoman Turkey. In these cases, the minority groups lacked coercive power but enjoyed significant economic power.

What determines the mapping between coercive and economic power, and how does this mapping determine the type of institutions that can emerge in society? Specifically, what are the implications of the relative distribution of economic and coercive power for sustaining inclusive institutions?

To answer these questions, we develop a formal model where we examine the role of complementarity in groups' economic activities in shaping the distribution of economic and coercive power necessary to sustain inclusive institutions. We argue that balance in both economic and coercive power is necessary. Our analysis shows that gross complementarity in production demands a more equitable distribution of resources than gross substitutability to keep the balance in economic and coercive power among social groups. However, we find that the relationship between the elasticity of substitution and the maximum resource inequality that can sustain inclusive institutions is non-monotonic, with both very high complementarity and very high substitutability requiring a more equal distribution of resources. Finally, we show that the strength of complementarities determines which group may opt for conflict, with the weaker group (in coercive power) choosing to engage in conflict under gross substitutability, and the stronger group under gross complementarity.

While inequality is often considered detrimental to social order (Acemoglu Robinson2022, Piketty2017), our results show that complementarity in groups' economic activities determines the degree of inequality that can be consistent with inclusive institutions. A balanced social distribution of power may nevertheless be too unequal to sustain social order under extreme complementarities, whereas a highly skewed distribution of power may not be problematic for social order at middle complementarity levels.
We also contribute to the literature on complementarities and peaceful outcomes. Previous research associate complementarities with peaceful outcomes (Becker Pascali 2019, Jha 2013, Jha 2018, Silve2018). Our research suggests that, overall, complementarity requires greater equality, making it more difficult to sustain order. That said, this relationship is non-monotonic: increasing complementarity can lead to more peaceful outcomes at low to medium levels, but can lead to more conflictual outcomes at medium to high levels.

Finally, we shed light on the conditions under which groups with greater coercive power might prey on the weak or vice versa. On the one hand, common wisdom suggests that the weak has to settle with worse deals, and thus the powerful would have greater incentives to prey on the weak (Fearon 1995, Powell 1999). On the other hand, the literature also highlights that the weaker side may fight harder, or otherwise may have advantages in confrontations with the strong (Hirshleifer 1991, Sechser 2010). In our model, we observe both the strong preying on the weak and the weak preying on the strong in equilibrium. Under gross substitutability, the group with weaker coercive power may prefer conflict over order and thus ``prey'' on the stronger side. Under gross complementarity, the stronger group may prefer conflict over order and thus ``prey'' on the weaker side. By allowing economic and coercive power to interact with each other depending on the elasticity of substitution, we explain both phenomena in a unified framework. This is related to recent work that emphasizes the importance of considering different dimensions of power to explain the occurrence of conflict (Herrera et al 2022, Morelli et al 2023).

Authors

• Ekrem T. Baser, Bilkent University

• Tanguy Le Fur, New York University Abu Dhabi