The Effect of Foreign Influence on Conflict and Social Identity in Ethnically Diverse Societies ^†

This paper develops a formal model to analyze how foreign interventions—via resource transfers towards mobilization, technological upgrades of the mobilization technology, and various forms of conditional aid—reshape identity choices and conflict dynamics in divided societies. After a foreign intervention occurred, individuals simultaneously decided how many resources to allocate to conflict and whether to identify as ethnic or national. The utility derived from identity decreases with the perceived social distance from the chosen group and increases with the group’s status. Foreign interventions can modify identity choices by affecting perceived social distance or group status. Our results reveal that inclusive aid and material support for mobilization are likely to induce national identification. Conversely, exclusive or ethnically targeted aid and technological upgrades of mobilization technology are likely to result in ethnic identification. We show that for all types of interventions analyzed, conflict mobilization is lower and the intervened nation’s material payoff is higher when individuals identify nationally than ethnically.