Violence is key to understanding human interaction and societal development. The natural state of societal organization is that a subset of the population, capable of mustering organized large-scale violence, forms an elite coalition that restrains both violence and coercive appropriation. We highlight key mechanisms underlying such natural states. Our results show that natural states either have a large elite coalition and a high tax rate, or a weak elite and a high level of appropriation by a large group of violence specialists outside the elite, termed warlords. When output elasticity of effort is high, it induces elite members to limit their tax rate, which in turn promotes warlordism. Only when the elite coalition is small but still able to control a sizeable share of production, as a result of its cooperative quality and a low decisiveness of conflict between elite and warlords, do we find comparatively high levels of production and producer welfare. Our results imply that almost all natural states experience continuous coercion exercised by elite members and violence between elite coalitions and warlords. We show that this is not a temporary out-of-equilibriumsituation but a permanent phenomenon, as can most conspicuously be observed in parts of Sub-Saharan Africa. Our model thus illustrates the rigidity of natural states

Additional Metadata
Keywords Violence, Institutions, Natural state, Limited access order, Appropriation
JEL Noncooperative Games (jel C72), Institutions: Design, Formation, and Operations (jel D02), Welfare Economics: General (jel D60), Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior (jel D72), Conflict; Conflict Resolution; Alliances (jel D74), Formal and Informal Sectors; Shadow Economy; Institutional Arrangements: Legal, Social, Economic, and Political (jel O17), Political Economy; Legal Institutions; Property Rights (jel P48)
Persistent URL hdl.handle.net/1765/127945
Journal Journal of Economic Behavior & Organization
Citation
van Besouw, B., Ansink, E., & van Bavel, B. (2016). The Economics of Violence in Natural States. Journal of Economic Behavior & Organization, 132, 139–156. Retrieved from http://hdl.handle.net/1765/127945