Academic journal article The American Journal of Economics and Sociology

Cooperation and Conflict: Evidence on Self-Enforcing Arrangements and Heterogeneous Groups

Academic journal article The American Journal of Economics and Sociology

Cooperation and Conflict: Evidence on Self-Enforcing Arrangements and Heterogeneous Groups

Article excerpt

I

Introduction

A PREVAILING WISDOM IN THE LITERATURE CONTENDS that social heterogeneity presents a problem for cooperation. Research by Greif (1989), Ellickson (1991), Bernstein (1992, 2001), Benson (1989, 1990), Zerbe and Anderson (2001), Landa (1994), and Clay (1997) all provides historical evidence of self-enforcing arrangements ensuring that contracts made are carried out smoothly. A common criticism of these examples, however, maintains that self-enforcing arrangements break down when extended outside the bounds of close-knit homogeneous communities (see, for example, Greif 1989, 1993; Landa 1994; Zerbe and Anderson 2001). A related literature on ethnic fractionalization emphasizes the obstacle heterogeneity creates in the provision of public goods (see, for example, Alesina, Baqir, and Easterly 1999; Easterly and Levine 1997; Cutler, Elmendorf, and Zeckhauser 1993; Goldin and Katz 1998) and in enabling trust (Alesina and La Ferrara 2002). It is widely believed that without a strong state, heterogeneous groups are not only unable to reap the gains from peaceful exchange but are also prone to inevitable eruptions of violent conflict (see, for instance, Horowitz 1985; Moynihan 1993; Kaplan 1993). But does the empirical record support this widely-held belief?. On a daily basis we face interaction with complete strangers who over most dimensions are completely different from us. That the overwhelming majority of these interactions are peaceful may be due to the fact that they occur in the shadow of formal enforcement, but is this really a compelling explanation?

We often find ourselves in circumstances in which the mere existence of formal enforcement is effectively worthless. Contracts are incomplete or costly to enforce, the legal system fails, and the state's eye cannot be everywhere all the time. Indeed, in many of our encounters with "outsiders" we find ourselves in a position where we could surely get away with taking advantage of others; nonetheless, we overwhelmingly refrain from cheating. Our everyday experiences seem to cast doubt on the "shadow of the state" explanation mentioned above.

Additionally, history provides numerous examples of heterogeneous groups exchanging peacefully without the aid of a formal legal system. The post-Soviet republics and Africa in particular are often thought of as typical of the disasters that befall heterogeneous territories where formal authorities fail to play a prominent role. But according to the research of Fearon and Laitin: "In those many spaces where state authority is absent or weak--for example, in many of the post-Soviet republics--interethnic relations frequently remain cooperative" (1996: 715). In fact, between 1991 and 1995, among 30 of the non-Russian republics formerly under Soviet control, only three have experienced Russian/titular violence. The 14 former republics of the Soviet Union, excluding the Russian Federation, contain 45 different ethnic groups. Of these 45, only two have experienced violent conflict (Fearon and Laitin 1996: 716). In Africa the evidence is even more striking. Using data from Morrison, Mitchell, and Paden (1989), Fearon and Laitin find that between 1960 and 1979 the average number of violent events as a percentage of intergroup interaction is roughly zero (1996: 717).

While I certainly do not wish to say that there is never intergroup conflict, I contend that the amount of such conflict has been dramatically overstated and the occurrence of peaceful interaction dramatically understated. The common view, in short, reverses the empirical reality of the world. While most academic work suggests that violence is the rule, it is really the exception. For intergroup interactions in the real world, "peaceful and cooperative relations are by far the more typical outcome than is large-scale violence" (Fearon and Laitin 1996: 715).

This article aims to correct the false impression created by much of the literature that differing social groups cannot realize the benefits of exchange without a formal legal apparatus. …

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