Uneven Growth, Economic Inequality and Social Conflict

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Abstract Proposal Title: Uneven Growth, Economic Inequality and Social Conflict Proposal Number: SES - 1261560Principal Investigator: Ray, DebrajIn many developing countries, economic growth has been fundamentally uneven. The effect of uneven growth and economic inequality on the potential for violent social conflict is the subject of this project. It continues and extends a research program on economic development, distribution and conflict. That program rests on two core assertions. First, social conflict has strong economic correlates: variables such as per-capita income and natural resource revenues shape the incidence and extent of such conflict. Yet, classical expressions of conflict between economic haves and have-nots are relatively rare; often, warring groups are demarcated by noneconomic markers such as ethnicity or religion. Previous research has shown that ethnic polarization and fractionalization strongly influences conflict. The current project takes the research a step further by considering the economic characteristics of ethnic groups and how these enter into the determination of social conflict over and above the demographic characteristics. The analysis begins with a significant extension of the theoretical framework introduced by Esteban and Ray (American Economic Review vol. 101, 1345-1374, 2011) to include joint economic and demographic determinants of ethnic conflict. It is shown that the two sets of variables interact in specific ways, that discipline the functional relationships to be tested and (in some cases) estimated. The emphasis in is on within-group and cross-group economic inequality and its effects on conflict. The empirical exercise based on the theory is applied to a cross-section of countries.The project then uses the same framework to inform an empirical study of Hindu-Muslim violence in India. The emphasis in this section is on changes in group per-capita incomes (rather than within-group distribution). It is argued that Muslim group incomes in India have been positively associated with subsequent religious conflict, while the opposite is true of Hindu incomes. The theory permits an interpretation of this striking empirical finding.The last part of the project theoretically examines a number of complementary arguments that point towards the salience of ethnic violence in the face of economic disparity and uneven change. This part of the project takes a very different route from traditional hypotheses, which would associate such economic characteristics with a greater probability of class, not ethnic, conflict.Broader Impacts: the study of violent conflict, especially within developing countries, is of immense importance. Uneven growth often involves significant reallocation of resources, human and physical. Even if such growth is warranted from a long-term perspective, it can bring immense hardship in the short to medium run, and it can do so to individuals and groups who will never be adequately compensated in their lifetime. Does economic growth stifle conflict, or might it exacerbate it? What is the relationship between inequality and conflict? Why might class conflict give way to ethnic conflict? The objective is to show how the economic theory of conflict gives rise to a new set of testable predictions which integrates economics, politics and demography. It is hoped that political scientists, sociologists and ethnographers will find such an attempt useful and complementary to their own work. To this end, the current project continues to push towards a book on the economics of ethnic violence. The intention is to put together, in a cohesive way, a large literature from economics, political science and sociology on the topic of conflict in developing countries. The principal investigator plans to develop and teach a course on "Uneven Growth and Conflict," to develop a detailed outline for the writing of such a book.