Rebellion, repression and welfare

Abstract

I develop a dynamic model of social conflict whereby manifest grievances of the poor generate the incentive of taking over political power violently. Rebellion can be an equilibrium outcome depending on the level of preexisting inequality between the poor and the ruling elite, the relative military capabilities of the two groups and the destructiveness of conflict. Once a technology of repression is introduced, widespread fear reduces the parameter space for which rebellion is an equilibrium outcome. However, I show that repression driven peace comes at a cost as it produces a welfare loss to society.