Conflict, institutions, and technology

There are two different views about the link between institutions or related social conflict and society’s state of technology. According to the institutional view, institutions constitute a primary parameter that may shape technology; societies with a more efficient institutional framework (and less social conflict) enjoy a better state of technology. For example, strong or weak institutions (which then affect technological progress) may stem from historical accidents at critical junctures. However, according to the technology view, it is the level of technology (or, in general, of economic progress) that may shape a country’s institutions and the extent of wasteful conflict. Technology is a primary parameter, while social conflict and the related institutional framework are secondary. Still, despite its importance, the technology view has received relatively little attention in formal economic or political science theory; much of the discussion is informal. Thus the mechanisms through which technology may affect social conflict and institutions are not well-understood.

I present a general equilibrium analysis of social conflict and institutions, in which the role of technology is fundamental. Conflict technology affects the value of warriors’ labor, either in offense/rent-seeking, or in defense/safeguarding. When conflict technology and labor are substitutes (complements), a technological improvement exerts a downward (upward) pressure on warriors’ wages, encouraging more agents to become producers (warriors), rather than warriors (producers), and facilitating the establishment of stronger (weaker) property rights institutions. Conflict technology may shape the institutional framework when its level is especially high or low, while institutions constitute an independent parameter at intermediate levels. Production technology is irrelevant to social conflict and to property rights institutions.