On the Theory of Ethnic Conflict

We present a theory of ethnic conflict in which coalitions formed along ethnic lines competefor the economy’s resources. The role of ethnicity is to enforce coalition membership: inethnically homogeneous societies members of the losing coalition can defect to the winnersat low cost, and this rules out conflict as an equilibrium outcome. We derive a numberof implications of the model relating social, political, and economic indicators such as theincidence of conflict, the distance among ethnic groups, group sizes, income inequality, andexpropriable resources.[...]