Monday, April 14, 2008

The Economics of Poltical conflicts

Very recently, the media was bombarded by the clash within the Nation awakening party, the political party is divided into two different sides. I would like to see how the economics rational explaining it. It should be clear that I am not a supporter of both parties, it is interesting for me however, all that had happened are turn out to be logically rational.
A conflict by every means is costly, therefore they (both parties) are operating in a high cost, and below its optimum full production level. In economic term, we call it below the production possibilities frontier. This is represented by the graph on the left. any where inside the cone are feasible to enough to attained. In our case the two axis represent the two parties (M for vertical and GD for horizontal), the cone (PPF) is the number of potential voters, as internal split will cost them some voters, hence both are operating inside the cone, instead of operating in the blue line of PPF where the number of voters is much greater.

ISLAH on the way?
if that's the case, then why is so hard for them to do islah? it's not very surprising, because the islah is in fact not a sustainable point. This means that there are problem in dynamic inconsistencies in doing islah, preferences of both parties will change overtime. You see, say M is willing to accept islah, they might move from every point inside the cone to one point at the blue line, M groups are signaling, they are ready for peace treaty, calling disarmaments in their side. the problem with this, is that in the other side GD will now have a stronger incentive to wipe out all the M group, and therefore they will opt for a corner solution, choosing the 100 percent voters on the rightest point of the blue line. This happens for vice versa, with the benefit of the second mover. This explains why both parties decided to wait. As long as both parties don't have credible expected peace commitment there will no be islah. Both parties seem to send signals of continues fighting.

why are they fighting anyway?
I am not a politician, I honestly don't know. However,in economics literature conflicts might happen depends on the feasibility of such conflicts, internal splits or whatever we call it.
feasibility depends in two term, benefit and cost, according to Collier (2005,2006) , conflicts will happen wherever it is feasible to do.The benefit is high, since the general election is coming, more pie will be available in the near future, and if they are lucky, less mouth to feed. The cost is not enormous, some says in PKB, GD is irreplaceable, so preference toward GD is almost inelastic to external shocks. the last but not least is the probability to lose and to win, if we say the non-activating of M is a coup d'etat process then it's a rational thing to do, because historically, the other group tend to win anyway.

what about in the future?
the problem of conflicts is, it works in economies of scale framework, it gets better when it escalates even more. the losers will ask for friends and allies for help, and so do the winners, both parties accumulating their power in the expense of others which tend to be persistent Collier(2002) call this a conflict trap. I don't really understand politically, but fragmenting a political party in many small pieces is not very healthy for them, just look at PPP, or others. one thing for sure, if GD wins once more time, the more likely this things happen in the future, in an increasing scale of splits. this might happen in the future either because the probability of winning is getting higher, or whereas the cost turned to be insignificant. However no matter how significant that might be, it seems that the counter reaction is getting tougher everyday.

well, just see what will happen shall we?, time will tell.

by Rajawali muda


cheriatna said...

blog berkesan, teruslah menulis.
salam dari arsitek depok

Berly said...

Let see from the Gus Dur (GD) side.

If he think that letting Muhaimin (M) stay longer as chairman will diminished his influence then it is rational for him to risk getting smaller support than nothing at all.

Using repeated game, if he tolerate M for any longer than even if he managed to drive M out later it will motivate other to behave like him. So it better to pluck the weed while still small as credible threat to potential rivals.

fajar said...

salam kenal