Threats to Peace: Development and Conflict

New York University, New York NY

Investigators

Abstract

Economic growth in countries undergoing structural transformations often involves a massive reallocation of resources, human and physical. Even if such growth is warranted from a long-term perspective, it can bring hardship in the short to medium run, and it can do so to individuals and groups who will never be compensated for their pains, in their lifetime. It is not surprising, then, that economic growth can be conflictual. This project explicitly brings an economic perspective to the theory and empirical study of social conflict, as opposed to simplistic pronouncements describing such conflict as a "clash of civilizations." Each of the three components of this project describes an interplay between economic and social characteristics that could lead to conflict. The first component studies how polarization across different ethnic groups can be exacerbated by economic inequality within each group. The second component studies whether small or large groups enter into conflict against the State, and how these outcomes are influenced by the nature of the "conflict prize." The final component studies the connections between trade liberalization and violence. A central theme (and earlier finding) is that social conflict, while economically motivated, is often organized along ethnic lines: ethnically polarized societies are conflictual. The first project extends this research by interacting economic factors; specifically, within-group economic inequality, with polarization. Such inequality synthesizes two different aspects of the conflict process: the poor in a group supply their labor, the rich their finances. This perverse synergy of finance and labor is typically unavailable in class-based conflicts. It can make ethnic violence salient. The group-inequality/conflict nexus appears to find strong empirical support. The second project explores yet another aspect of the interaction between economics and ethnicity. It combines and reconciles two very different views of conflict -- one, the "tyranny of the majority," in which large groups impose their preferences on smaller groups, with another, the "Pareto-Olsen thesis," which argues that smaller groups are more likely to initiate lobbies or conflicts rather than larger groups. The two views are reconciled by varying the nature of conflict payoffs: private payoffs encourage smaller groups to be conflictual, while the opposite is true of public payoffs. These relationships are strongly visible in the data. Another previous theme is that economic growth might be highly conflictual in the near term, especially if that growth has been uneven across sectors or groups. The final project studies trade liberalization and gender-based violence in India. It shows that the reduction of trade barriers -- especially non-tariff quotas -- has had a significant and positive impact on violence against women; specifically, on rape. The reduction of import quotas has created large sectoral movements of labor; the same is not true when tariffs change in the presence of quotas. The study connects liberalization with the dislocation of male labor and with the new entry of female labor, and links these processes to sexual violence. While sustained growth in the long term could finally tame conflict, there is every possibility that medium-term uneven growth, among groups or sectors, could inflame it. The intellectual core of this research marries traditional economic theory - rational individuals, strategic environments characterized by the methodological use of game theory, and equilibrium solution concepts - to generate and test predictions about one of the most significant phenomena in our lifetime: internal social conflict, often demarcated along ethnic lines.