We model inter-household transfers between nomadic livestock herders as the state-dependent consequence of individuals' strategic interdependence, resulting from the existence of multiple, opposing externalities-more specifically, a public-good security externality among individuals sharing a social (e.g. ethnic) identity in a potentially hostile environment, and a resource appropriation externality related to the use of common property grazing lands. Our model augments the extant literature on transfers, and is more consistent with the limited available empirical evidence on heterogeneous and changing transfers' patterns among east African pastoralists. The core principles of our model possibly apply more broadly, for example to long-distance migrants or even 'foot soldiers' in street gangs.
ASJC Scopus subject areas
- Economics and Econometrics