Social Conflict and the Predatory State

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Abstract. I model the political economy of predatory governance in an internally divided society. Two competing logics characterize the relationship between social conflict and the revenues that a predatory ruler can extract. Internal conflict may benefit the government by discouraging collective resistance against predation (the divide-and-rule logic), but it may reduce revenues by shrinking economic output (the productivity logic). The productivity logic is inoperative for states funded by natural resource wealth, so these states benefit from social conflict. However, I find a sharp opposite for predatory states funded by the output of the population’s labor—in equilibrium, the economic benefits of greater productivity always outweigh the political benefits of a divided population. Consequently, social fractionalization benefits the predatory state if and only if its revenues derive from natural resources or a similar fixed source. However, changes in the labor costs of internal conflict have more ambiguous effects.