The Political Economy of Conflict and Appropriation

193 Pages·1996·4.54 MB·English

by  Michelle R. Garfinkel

The political economy of
conflict and appropriation
Traditional economic analysis has concentrated on production and trading as
the only means by which individual agents can increase their welfare. But both
the history of industrialized countries and the current experience of many
developing and transition economies suggest a major alternative: the appropri-
ation of what others have produced through coercion, rent seeking, or influence
peddling. Appropriation was how nobles, bandits, and kings used to make a
living. The same is true nowadays for mafia bosses, army generals, lobbyists,
and corrupt officials.
The essays in this volume integrate conflict and appropriation into econom-
ic analysis. In the first of two sets of essays, the actual or potential use of force
is a primary determinant of aggregate outcomes. In the second set, appropria-
tion takes subtler forms and is mediated by the political process of modern
states. Collectively the essays indicate how, once appropriation is taken into
account, some central properties of traditional economic analysis, as well as
the presumption that they hold in reality, can break down. The contributions
are part of the recent trend of reintroducing politics into economics, a trend
that is having a growing impact on political science as well as on economics.

The political economy of
conflict and appropriation
EDITED BY
MICHELLE R. GARFINKEL
University of California-Irvine
STERGIOS SKAPERDAS
University of California-Irvine
CAMBRIDGE
UNIVERSITY PRESS
CAMBRIDGE UNIVERSITY PRESS
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Cambridge University Press
The Edinburgh Building, Cambridge CB2 8RU, UK
Published in the United States of America by Cambridge University Press, New York
www.cambridge.org
Information on this title: www.cambridge.org/9780521560634
© Cambridge University Press 1996
This publication is in copyright. Subject to statutory exception
and to the provisions of relevant collective licensing agreements,
no reproduction of any part may take place without the written
permission of Cambridge University Press.
First published 1996
This digitally printed version 2008
A catalogue record for this publication is available from the British Library
Library of Congress Cataloguing in Publication data
The political economy of conflict and appropriation / edited by
Michelle R. Garfinkel, Stergios Skaperdas.
p. cm.
Papers presented at a conference held at the University of
California-Irvine in May 1994.
ISBN 0-521-56063-2 (he)
1. Economics - Political aspects - Congresses. 2. Power (Social
sciences) — Economic aspects — Congresses. I. Garfinkel, Michelle
R., 1961- . II. Skaperdas, Stergios.
HB74.P65P656 1996
330 - dc20 95-45578
CIP
ISBN 978-0-521-56063-4 hardback
ISBN 978-0-521-08826-8 paperback
Contents
List of contributors page vii
Acknowledgments ix
1 Introduction: Conflict and appropriation as economic activities 1
MICHELLE R. GARFINKEL AND STERGIOS SKAPERDAS
2 Anarchy and its breakdown 15
JACK HIRSHLEIFER
3 Towards a model of territorial expansion and the limits
of empire 41
RONALD FINDLAY
4 Predation and production 57
HERSCHEL I. GROSSMAN AND MINSEONG KIM
5 Competitive trade with conflict 73
STERGIOS SKAPERDAS AND CONSTANTINOS SYROPOULOS
6 Increasing returns to politics in developing countries with
endogenous protection in a fixed-factor model 97
NAKGYOON CHOI AND STEPHEN P. MAGEE
7 Demosclerosis, or special interests "R" us: An information
rationale for political gridlock 119
SUSANNE LOHMANN
8 Deforestation, investment, and political stability 131
ROBERT T. DEACON
9 Violence and the assignment of property rights on two
Brazilian frontiers 157
LEE J. ALSTON, GARY D. LIBECAP, AND ROBERT SCHNEIDER
Index 178

List of contributors
Lee J. Alston Minseong Kim
Department of Economics Department of Economics
University of Illinois at Brown University
Urbana-Champaign Providence, RI 02912
Urbana, IL61801
Nakgyoon Choi Gary D. Libecap
Korea Institute for Economics Department of Economics
and Trade University of Arizona
Seoul, Korea Tucson, AZ 85721
Robert T. Deacon Susanne Lohmann
Department of Economics Department of Political Science
University of California- University of California-Los Angeles
Santa Barbara Los Angeles, CA 90024
Santa Barbara, CA 93106
Ronald Findlay Stephen P. Magee
Department of Economics Department of Finance
Columbia University University of Texas-Austin
New York, NY 10027 Austin, TX 78712
Herschel I. Grossman Robert Schneider
Department of Economics World Bank
Brown University Washington, D.C.
Providence, RI 02912
Jack Hirshleifer Constantinos Syropoulos
Department of Economics Department of Economics
University of California-Los Pennsylvania State University
Angeles University Park, PA 16802
Los Angeles, CA 90024

Acknowledgments
This volume consists of revisions of a number of papers presented at a con-
ference held at the University of California-Irvine in May 1994. Funding pro-
vided by the Focused Research Program in Public Choice, the School of Social
Sciences and the Academic Senate, all at the University of California-Irvine,
is gratefully acknowledged.
We also wish to thank Linda Cohen, Jaewoo Lee, Martin McGuire, James
Rauch, Robert Rider, Peter Rosendorff, Charles Stuart, and Murray Wolfson
for their extensive comments on the papers presented at the conference; Karen
Sandier for her invaluable help with the organizational aspects of the confer-
ence; and especially Amihai Glazer for his encouragement and participation in
various stages of the process. Finally, we are indebted to Scott Parris and
Linda Johnson for helping us to put this volume together.
IX