15
at the second panel of Figure 5. If money is transferred from those who contribute no resources
at all to those who do, contributions surely rise. However, it is also possible that transfers
take place among those who are already contributors. In that case the net result will depend
on the curvature of this “contribution function”. Because this cost function for contributions
comes from some utility function for private consumption, it is easy to check that this positive
stretch of the contribution function is linear. Therefore regressive transfers in this zone have no
effect, unless it lands the losers in the zero-contributions segment, in which case the net effect
on overall contributions will continue to be positive.16
4.3.3. Correlating Wealth and Radicalism. Our last exercise studies the effect of an increased cor-
relation between radicalism and wealth.
A specific way to do this by leaving all marginal distributions unchanged is simply by chang-
ing moderates to radicals at high wealth levels and vice versa for lower wealth levels. More
formally, fix a wealth pair (w1, w2) with w1 < w2 and a pair of radicalism levels (x1 , x2) with
x1 < x2 and construct a new distribution nh over types as follows:
nh (xι, wι) = nh(x1,w1 ) + e, nh (x2, w2) = nh(x2,w2) + e,
(7) nh (xι,w2) = nh(x1,w2) — e, nh (x2,wι) = nh(x2,w1 ) — e, and
nh (x, w) = nh(x, w) otherwise.
It should be clear from this construction that a change of this sort will positively affect overall
contributions if higher wealth increases the marginal propensity to contribute from radicalism.
If the lower wealth in question has zero contributions anyway, then this condition will hold
automatically and the increased correlation between radicalism and wealth must increase the
tendency for this group to engage in conflict.
The issue of an increased correlation of wealth and radicalism is of interest in several conflict-
ual situations. Perhaps the most obvious instance, and one that has received the greatest amount
of international attention, is the presence of large amounts of wealth behind terrorist activities
linked to Al-Qaeda and similar fundamentalist groups. But there are several other examples,
and they span different religious beliefs, not just Islam. In the example of Hindu fundamental-
ism that we have referred to in this paper, there is rising awareness of the role that rich Hindu
expatriates play in the funding of organizations that explicitly lay down Hindutva goals.
5. Conclusions
We present a model of religious/ethnic conflict, in which discriminatory government policy
or social intolerance is responsive to various forms of ethnic activism, including violence. It is
this perceived responsiveness — captured by the probability that the government gives in and
accepts a proposed change in ethnic policy — that induces individuals to mobilize in support for
their cause. Yet, mobilization is costly and demonstrators have to be compensated accordingly.
An implication of our model is that the standard connections between the intensity of conflict
on the one hand and inequality or polarization across or within groups on the other might
be too simplistic. The interaction between the different relevant factors presents nuances that
simple empirical tests would fail to capture. A sizeable literature is concerned about whether a
particular change in the distribution of income, radicalism or population will precipitate or not
16This discussion shows that if — in a more general model — contributions are strictly concave in income in the
positive segment, a regressive transfer could bring down aggregate contributions, which works against our result. But it
would not be sufficient. There is still the zone of zero contributions, which works in favor of the proposition, as well as
the possible impact on the supply of activists, discussed in the main text.