Religious Legitimacy and Long-Run Economic Growth in the Middle East

This chapter explores the role that religious legitimacy played in the long-run economic fortunes of various Middle Eastern states. It first lays out a theory of political legitimacy which argues that a society’s laws and policies will be reflective of the bargain made between rulers and those who can provide legitimacy and coercion. To the extent that religious legitimacy is effective, religious authorities will therefore have some seat at the political bargaining table and policies will be reflective of their desires. Since Islam has been an effective source of political legitimacy for much of its history, most political equilibria in Muslim states have involved its use to some degree. This theory is then applied to medieval and early modern (primarily Ottoman) Middle Eastern history to help explain the economic divergence with northwestern Europe. The chapter concludes by highlighting how this theory complements recent theories put forth by Timur Kuran, Lisa Blaydes and Eric Chaney, and Ahmet Kuru.

The Agent-Selection Dilemma in Distributive Bargaining

Principals often bargain through agents, and past work suggests that such bargaining too often ends in costly impasse. We present experimental evidence that the agent-selection process which precedes bargaining may be a significant driver of failures to reach agreement. We find that principals select overly aggressive agents, such that those sent to the bargaining table are more polarized in their views than are potential agents in general. Agent-selection makes parties worse off than if they were assigned an agent at random and, conditional on engaging in agent-selection, both parties could improve their outcome by selecting a less aggressive agent.

Two Differential Games Between Rent-Seeking Politicians and Capitalists: Implications for Economic Growth

We comparatively study two differential games between politicians and capitalists in terms of reducing rent-seeking distortions and stimulating economic growth. These two games imply two relationships — top-down authority and rational cooperation — between politicians and capitalists. In the current context, we prove that cooperation leads to faster growth than does authority, and simultaneously satisfies individual rationality, group rationality, Pareto efficiency and sub-game consistency. We thus show that setting a bargaining table between capitalists and politicians may create desirable incentives for reducing rent-seeking distortions, developing the spirit of capitalism and stimulating economic growth.

Resolving attacker-defender conflicts through intergroup negotiation

The target article focuses on how attacker-defender conflicts are fought. This commentary complements it by considering how attacker-defender conflicts may be resolved at the bargaining table. I highlight multiple linkages between asymmetric intergroup conflict as modeled with the attacker-defender game and negotiation research and illustrate how the proposed model of attacker-defender conflicts can inspire new research on intergroup negotiation.

Economic Sanctions and North Korea

The United States has enacted economic sanctions against North Korea since the early 1950s when North Korea attacked South Korea. Can North Korea be pressured into giving up its nuclear weapons? This article discusses the role of economic sanctions as a tool of international diplomacy with North Korea. Using concepts and tools taught in undergraduate economics classes, the article discusses the operation of sanctions and then it applies this analysis to the case of North Korea. The article examines the success that sanctions have achieved in bringing Kim Jong Un to the bargaining table and the difficulties that sanctions encounter in promoting a lasting resolution of the conflict between North Korea and the United States. The article is written for a broad audience of economics students. JEL Classifications: F0, F1