DP5622 On the Theory of Ethnic Conflict

Author(s):	Francesco Caselli, Wilbur John Coleman II
Publication Date:	April 2006
Keyword(s):	ethnic distance, exploitation
JEL(s):	P48, Q34, Z13
Programme Areas:	International Macroeconomics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=5622

We present a theory of ethnic conflict in which coalitions formed along ethnic lines compete for the economy's resources. The role of ethnicity is to enforce coalition membership: in ethnically homogeneous societies members of the losing coalition can defect to the winners at low cost, and this rules out conflict as an equilibrium outcome. We derive a number of implications of the model relating social, political, and economic indicators such as the incidence of conflict, the distance among ethnic groups, group sizes, income inequality, and expropriable resources.