| Abstract: | Accounts of state failure in the developing world frequently highlight a logic of "spoils politics" in which a government and an opposing faction vie for control of the state and the accompanying spoils. Attempts to buy the opposition off play a key role in this logic, and an informational problem often complicates these efforts. Because of limited transparancy, the government generally has a better idea about the actual size of the spoils than the opposition does. We formalize this aspect of spoils politics as a signaling game in which the government has private information about the size of the spoils and tries to co-opt the opposition by offering a share of the spoils. The opposition can accept the offer or reject it by fighting. Consistent with the strong empirical finding that the probability of civil war is higher when income is low, the probability of breakdown increases as the size of the spoils decreases. We also study the effects of uncertainty, the opposition's military strength, the cost of fighting, and power-sharing agreements on the probability of fighting. |
