Development and Conflict - Debraj Ray (NYU)
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Development and Conflict - Debraj Ray (NYU)

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Roundtable on Development: poverty, corruption, fragmentation and conflict ...

Roundtable on Development: poverty, corruption, fragmentation and conflict

Barcelona GSE Summer Forum
Barcelona Graduate School of Economics
June 14, 2013

http://www.barcelonagse.eu/summer-forum.html

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Development and Conflict - Debraj Ray (NYU) Development and Conflict - Debraj Ray (NYU) Presentation Transcript

  • Starting point: economic development is intrinsically uneven.Contrast with theories based on convergence.Debraj Ray, “Uneven Growth: A Framework for Research in DevelopmentEconomics,” Journal of Economic Perspectives 24, 45–60 (2010).
  • Uneven GrowthRootsPath-dependenceStructural changeGlobalization
  • Uneven GrowthRootsPath-dependence (sensitivity to initial conditions)Structural changeGlobalization
  • Uneven GrowthRootsPath-dependenceStructural change (e.g., agriculture → industry)Globalization
  • Uneven GrowthRootsPath-dependenceStructural changeGlobalization (comparative advantage, FDI)
  • Uneven GrowthReactions
  • Uneven GrowthReactionsThe lives of others are on display:Aspirations and frustrations are socially generated.
  • Uneven GrowthReactionsThe lives of others are on display:Aspirations and frustrations are socially generated.Unclear if this exposure leads to betterment or to despair.Hirschman’s tunnel effect.
  • Uneven GrowthReactionsThe lives of others are on display:Aspirations and frustrations are socially generated.Unclear if this exposure leads to betterment or to despair.Hirschman’s tunnel effect.Two more things:Occupational choice is slow, intergenerational, imprecise.
  • Uneven GrowthReactionsThe lives of others are on display:Aspirations and frustrations are socially generated.Unclear if this exposure leads to betterment or to despair.Hirschman’s tunnel effect.Two more things:Occupational choice is slow, intergenerational, imprecise.The great acceleration: UK, 1780, 58; US, 1839, 47; Japan,1885, 34, Brazil, 1961, 18, Korea, 1966, 11, China, 1980→, 7–9.
  • Uneven GrowthReactionsThe lives of others are on display:Aspirations and frustrations are socially generated.Unclear if this exposure leads to betterment or to despair.Hirschman’s tunnel effect.Two more things:Occupational choice is slow, intergenerational, imprecise.The great acceleration: UK, 1780, 58; US, 1839, 47; Japan,1885, 34, Brazil, 1961, 18, Korea, 1966, 11, China, 1980→, 7–9.The potential for conflict.
  • The Salience QuestionUneven growth −→ conflict, but along what lines?Religion, ethnicity, geography, occupation, class?
  • The Salience QuestionUneven growth −→ conflict, but along what lines?Religion, ethnicity, geography, occupation, class?The Marxian answer:classexample: Maoist violence in rural India
  • The Salience QuestionUneven growth −→ conflict, but along what lines?Religion, ethnicity, geography, occupation, class?The Marxian answer:classexample: Maoist violence in rural IndiaBut the Marxist argument is problematic.Conflict is usually over directly contested resources.
  • Directly Contested ResourcesLabor marketsEthnic or racial divisions, immigrant vs nativeAgrarian landRwanda, Darfur, ChattisgarhReal estateGujarat, BengalBusinessKyrgystan, Ivory Coast, Malaysia . . .
  • Contestation ⇒ conflict between economically similar groupsSome counterarguments:bauxite/land in Maoist violenceagrarian/industrial land in Singur and Nandigram.⇒ class violence, but exception rather than the rule.The implications of direct contestation:Ethnic markers.“In much of Asia and Africa, it is only modest hyperbole toassert that the Marxian prophecy has had an ethnic fulfillment.”Horowitz (1985)
  • Primordialism vs InstrumentalismInstrumentalist viewEthnic conflict could well be economic (as in Marx), butExpressed via non-economic markers (ethnicity).Compatible with (but far broader than) the primordialist view.Huntington’s Clash of Civilizations (1993, 1996); see also Lewis.
  • Are Ethnic Divisions Conflictual?Based on Esteban and Ray (AER 2011)Groups engaged in conflict over some combination of:Public prize:religious dominance, political control, hatreds, public goodsPrivate prize:Oil, diamonds, scarce landEach group contributes resources to obtain favorite outcome.Conflict: sum of all resource contributions
  • Predicted ConnectionsConflict over public goods related to polarization P.Conflict over private goods related to fractionalization F.Overall connection:conflict per-capita λP + (1 − λ)F ,whereλ = relative importance of public prize
  • Empirical InvestigationFrom Esteban, Mayoral and Ray (AER 2012, Science 2012)138 countries over 1960–2008.C: PRIO.isc: Continuous index, Banks (2008).Indices of publicness and privateness of the prize
  • [1] [2] [3] [4]C isc C iscP ∗∗∗ 5.16(0.001)∗∗∗ 19.50(0.002)- 1.48(0.606)-16.33(0.227)F ∗ 0.93(0.070)∗ 3.56(0.061)0.76(0.196)0.31(0.878)P Λ ∗∗∗11.174(0.003)∗∗∗ 61.89(0.001)F (1 − Λ) ∗ 1.19(0.097)∗∗∗ 10.40(0.000)gdppc ∗∗- 0.34(0.047)∗∗∗- 2.26(0.004)∗- 0.36(0.080)∗∗∗- 3.02(0.001)pop ∗∗∗ 0.24(0.000)∗∗∗ 1.14(0.000)∗∗∗ 0.21(0.001)∗∗∗ 1.30(0.000)nr - 0.27(0.178)- 0.53(0.497)- 0.00(0.570)0.00(0.432)mount 0.00(0.537)0.02(0.186)0.00(0.362)∗ 0.03(0.061)ncont ∗∗∗ 1.06(0.001)∗∗∗ 4.55(0.001)∗∗ 0.77(0.026)∗∗∗ 4.28(0.001)politics 0.18(0.498)0.29(0.789)- 0.00(0.328)∗∗- 0.00(0.026)lag ∗∗∗ 1.99(0.000)∗∗∗ 0.46(0.000)∗∗∗ 1.94(0.000)∗∗∗ 0.44(0.000)
  • And Economic Inequality?Lichbach survey (1989):43 paperssome “best forgotten”Evidence completely mixed.“[F]airly typical finding of a weak, barely significant relationshipbetween inequality and political violence . . . rarely is there a robustrelationship between the two variables.” Midlarsky (1988)
  • Economic Inequality and ConflictEsteban, Mayoral and Ray (in progress).Variable prio25 prio25 prio1000 prio1000 prioint priointGini ∗∗- 0.01(0.042)∗∗- 0.01(0.014)0.01(0.131)∗∗- 0.01(0.054)∗∗- 0.02(0.026)∗∗∗- 0.02(0.004)gdp 0.05(0.488)- - 0.03(0.533)- 0.02(0.871)-gdpgr - ∗∗∗- 0.00(0.001)- ∗∗∗- 0.00(0.001)- ∗∗∗- 0.01(0.000)pop 0.05(0.709)- 0.08(0.472)0.14(0.140)0.10(0.214)0.18(0.300)0.02(0.871)oil/diam ∗∗∗ 0.00(0.037)∗∗∗ 0.00(0.018)0.00(0.112)0.00(0.124)∗∗ 0.00(0.022)∗∗ 0.00(0.010)democ 0.07(0.301)∗ 0.11(0.093)- 0.02(0.668)- 0.06(0.283)0.05(0.614)0.06(0.525)
  • Surprising? Not ReallyTwo entry points:Wealth of the rival group — related to the gains from conflict.Wealth of the own group — related to the costs of conflict.⇒ No connection between intergroup inequality and conflict.
  • Uneven Growth: More to GrabSpilerman (1979) on 1960s race riots in the USThakore (1993), Das (2000) on 1992–3 Bombay and Calcuttariots [real estate]Rajgopal (1987), Khan (1992) on Bhiwandi and Meerut riots[competition in textile sector]Engineer (1994), Khan (1991) on Jabbalpur, Kanpur, Morad-abad [competition in bidis, brassware]Wilkinson (2004) on Varanasi [wholesale silk trade]Sarkar (2007), Gang of Nine (2007) on Singur and Nandigram[land transfers]
  • Uneven Growth: Incentives to EngageMurshed-Gates (2005), Do-Iyer (2007) on poverty in Nepal.Honaker (2008) on unemployment in N. Ireland.Dube-Vargas (2013) on coffee shocks in Colombia.Kapferer (1998), Senenayake (2004) on poverty in Sri Lanka.Gandhi (2003) on Dalit participation in Gujarat.Humphreys-Weinstein (2008) on poor conflict participants inSierra Leone.Woodward (1995) on “weekend warriors” in Serbia.
  • An Illustration: Hindu-Muslim conflictMitra and Ray (2013)Partition era of the 1940s, and earlierContinuing through the second half of the twentieth century.Around 8,000 deaths and 30,000 injuries over 1950–2000.
  • An Illustration: Hindu-Muslim conflictMitra and Ray (2013)Partition era of the 1940s, and earlierContinuing through the second half of the twentieth century.Around 8,000 deaths and 30,000 injuries over 1950–2000.Ethnographic studies suggest:Hindu aggressorEconomic component to violence
  • On the aggressor: Wilkinson (2004), Annual Reports of the Minori-ties Commission (1988 and 1989)1985–1987 526 Hindu-Muslim incidents in 10 states.Muslims were 12% of the population, but suffered60% of 443 deaths, 45% of 2667 injuries73% of property damageOn economics: Engineer (1987)“If [religious zeal] is coupled with economic prosperity, as has hap-pened in Meerut, it has a multiplying effect on the Hindu psyche.The ferocity with which business establishments have been de-stroyed in Meerut bears testimony to this observation. Entire rowsof shops belonging to Muslims . . . were reduced to ashes.”
  • Predictions:Income growth in aggressor group reduces conflict.Lowers incentive to participate in confrontations.But income growth in the victim group increases conflict.More to gain from grabbing or exclusion.And in particular:Economic progress can be inflammatoryeven across groups not demarcated by economics.
  • Casualties, 5-Year Average Starting Just After[Poiss] [Poiss] [NegBin] [NegBin] [OLS] [OLS]H Exp ∗∗∗-7.87 ∗∗∗-6.82 ∗∗-2.79 -3.31 ∗∗-9.15 ∗-8.46(0.005) (0.003) (0.093) (0.131) (0.033) (0.085)M Exp ∗∗∗5.10 ∗∗∗4.67 ∗∗2.64 ∗∗3.87 ∗∗∗6.89 ∗∗∗ 9.52(0.000) (0.001) (0.040) (0.023) (0.006) (0.009)Pop 4.28 3.91 0.62 0.74 -3.87 -1.23(0.468) (0.496) (0.149) (0.132) (0.614) (0.877)RelPol ∗5.55 ∗5.57 0.72 1.09 6.00 6.86(0.054) (0.056) (0.763) (0.715) (0.470) (0.408)Gini H -5.426 4.121 -14.473(0.317) (0.521) (0.342)Gini M 3.399 -5.952 -11.073(0.497) (0.362) (0.451)Lit, Urb Y Y Y Y Y YMus exp ↑ 1% ⇒ Cas ↑ 3–5%. Opp for Hindu exp.Result survives numerous robustness checks, including IV.
  • A Second Argument for Ethnic SalienceEsteban and Ray (2008, 2010)Organized conflict is people + finance.Within-group disparities feed the people/finance synergy.Class conflict, by definition of class, fails on this score.Leads to the one robust prediction for incomes and conflict:Within-group inequality is conflictual.Huber and Mayoral (2013)
  • A SummaryEconomic development fundamentally uneven.Large effects on aspirations.Occupational choice is a slow process.So conflict predicted under uneven development.Us and Them, profoundly contextual.The Marxian view sometimes makes sense, but not always.Direct contestability creates antagonism across similar groups.And non-class conflict, including ethnic conflict, may be focal.A research agenda in development economics cannot ignore this ques-tion of salience.