Economic polarization


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Economic polarization

  1. 1. 1ª edición, 2004Clasificación JEL: D74, D33, R13D.R. Universidad Iberoamericana, A.C. Prol. Paseo de la Reforma 880 Col. Lomas de Santa Fe 01210 México, D.F.Impreso y hecho en MéxicoPrinted and made in MéxicoLa serie documentos de investigación tiene comopropósito difundir el trabajo realizado por el personalacadémico asociado o adscrito al Instituto, con el fin deexplorar conocimiento útil para el diseño de políticaspúblicas y la toma de decisiones en organizacionessociales.Comentarios a esta serie son bienvenidos.Para más información sobre esta serie, comunicarse a lasiguiente dirección electrónica: Arcelia.castillo@uia.mx4
  2. 2. Economic Polarization and Governability in MexicoRodolfo De la Torre*ABSTRACT for understanding the radicalization of political 1 tension that culminated in social revolt .The purpose of this essay is to assess The economic crisis of December 1994alternative hypotheses regarding the origins of and the eruption of the EPR in 1996 seem torecent social rebellions in Mexico and to shed confirm the association of an unfavorablelight on the theory that it was a severe rise in economic performance with the violentpoverty and not social polarization that challenge to political authority. By changingpreceded the origins of violent conflicts. A the balance of power amongst economicconsequence of this belief has been that groups, civil violence opens the opportunity for 2attempts made by the Mexican Government to changes in social policies . One particular formdeactivate the economic factors that, in their of this concept considers the increase in povertyview, led to social unrest did not necessarily as the most important single variable behindupgrade poverty-reduction policies. social rebellion. In this light, the 1994 crisis The complexity of issues that must be taken and the stabilization policies it generated,into consideration do not generate simple results, avowed by market-oriented views, onlybut the picture that emerges from the data shows a --------------------weak but steady economic recovery before the * Director of the Sustainable Development andZapatista uprising. In this essay, several relative Social Justice Research Institute at Universidaddeprivation and polarization indexes are calculated Iberoamericana. De la Torre has been Editor of Elin order to appraise frustration and redistribution Trimestre Economico, Professor of Economics at theof power as theories for rebellion. There was no Instituto Tecnológico Autónomo de México (ITAM), and has taught Political Economy at El Colegio deuniform trend that could be observed from México, Centro de Investigación y Docenciaexamining frustration indicators, but when Económica (CIDE) and Universidad Nacionalrelative deprivation is combined with economic Autónoma de México (UNAM). Alicia Santana andpolarization and the resources of those with less Dora Ordoñez are gratefully thanked for their helpfulincome, the probability of an organized uprising assistance in the calculation of distribution indexes. 1increases significantly, as was the case before the Rus (1995, pp. 71,72) states: "... economic andChiapas rebellion. It seems very likely that the political conditions are at the root of the rebellion,..., those conditions have deteriorated noticeably since themain economic thrust that detonated civil mid-1970s, most especially since the early 1980s."violence was the polarization of income, even in Dietz (1995, p. 33) adds: "The economic factors thatthe case of the Ejército Popular Revolucionario trigger the uprising affect all the country..." Serrano(Revolutionary Popular Army). The evolution of (1997, p. 92) concludes: "...radicalization was thepoverty-reduction expenditure shows that after outcome of the compounded effect of deterioratingfour years of targeted programs and social socio-economic conditions, a distinctive process of polarization, and violent forms of repression".rebellion, the poorest states continued to suffer on 2 Serrano (1997, pp.92, 93) adds: "...radicalization,account of severe under-spending errors. by significantly altering the correlation of forces among traditional actors in Chiapas, has opened aThe uprising of the Ejército Zapatista de window of opportunity for social change in theLiberación Nacional (EZLN) (Zapatista Army region....the zapatista movement, by changing thefor National Liberation), focused attention on balance of power among regional actors, may havedeclining economic conditions as a key factor undermined the power of the local elite and could, in the mid and long-term, help the process of social and political change in Chiapas..." . 5
  3. 3. worsened an already adverse situation for the on this perspective, in order to understand civilreduction of poverty. A logical conclusion social upheaval, it becomes advisable to analyze,would then be: the government being challenged not only regional, but also national economicshould raise the quality of life of at least the conditions.poorest of its population by improving the Secondly, indigenous populations andeffectiveness of poverty-reduction programs if it peasant resettlements more frequently since thewishes to suppress some of the elements fuelling 1960’s and the increased flow of migrants andsocial rebellion by non-violent means. It could refugees to the region in the 1970’s and 80’s ledbe said that poverty finally had become to growing and conflicting property claims. Animportant enough to merit serious attention, as already fragile structure of property rights wasit now represented a threat to the ability to submitted to additional pressures by Presidentialgovern . Decrees that have attempted to redistribute land or The purpose of this essay is to show that it create natural reserves, while local agrarianis not conclusive that the decline in the standard policies have made confrontations on overlappingof living, in particular, an increase in poverty, property claims more hostile. Finally, in 1992preceded the origins of social revolt in Mexico. the Constitutional Reform of Article 27,Although, at the time of the uprising, very high withdrew the right to claim land and increased thepoverty indexes are undeniable, it can be amount of land that could be concentrated in the 5demonstrated that poverty plays a secondary role hands of one person or contained in an ejido ; thisin generating social conflict and that it decreased ruling, admittedly, resulted in uncertain and lowshortly before the Zapatistas resorted to armed expectations of resolving land petitions but was,confrontation. It is a different phenomenon, social nonetheless, important for social stability. At thepolarization, which, in fact, is primarily associated heart of the conflict were the quarrels over thewith the origins of organized civil violence. control of scarce productive assets.Therefore, an upgrade in poverty-reduction policies Thirdly, to already-existing hardships,would not necessarily mean success for the arduous labor conditions and poverty in Chiapas,Mexican Government in its attempts to deactivate the late 1980’s brought sharp drops in subsidieseconomic factors that could lead to social unrest. and in the price of coffee. In addition, the Programa Nacional de Solidaridad 3 (PRONASOL) (National Program for Solidarity)THE ORIGINS OF CIVIL VIOLENCE IN CHIAPAS operated a poorly targeted poverty-reduction program which assigned a growing, but stillThere is no simple, economic or political insufficient budget aimed at improving socialexplanation for the January 1994 rebellion in conditions. A national policy which followingChiapas. Neither the socio-economic conditions, international prices determined the allotment ofthe repression of the peasant and indigenous resources –while compensations to the leastpopulation nor the external influence of profitable agricultural activities were madereligious groups and political activists per se through public spending– was responsible for theelucidate the complex interplay of factors that changes in the price of coffee, the decrease inlie beneath the causes for the organized rebellion. subsidies and poverty-reduction allocations TheClearly, many of the causes were economic and result of this situation was that market forces andpolitical, but the weight that each one carried is public policies greatly influenced thenot evident. However, several elements are helpful redistribution of income at a regional and nationalin understanding the economic characteristics of level, a fact that could potentially explain thethe civil violence in Chiapas. outburst of social revolt. In the first place, the Chiapas uprising has Besides economic factors, other elementsnot been an isolated or merely local, social such as population pressures, inter-ethnic conflictsmovement. The stability of the Mexican and religious confrontations have played ancountryside was damaged by the dismantling of important part in explaining civil violence inthe Agrarian Reform and the decreasing 4participation of the State in rural life. Focusing proportions with roadblocks and massive assaults-------------------- on public offices".3 5 This section is based on Serrano (1997). Even among ejidatarios, the concentration of land4 As Serrano (1997, p. 75) states: "Indeed, the in a few hands was extremely high. In 1992, nation-Chiapas uprising, while distinct in its methods and wide, 5% of the ejidatarios owned 38.1% of all thethe content of demands, should also be seen within land allotted by the Government for cultivation.the context of mounting protest spreading among Chiapas was the fifth most important culprit to thisagricultural producers. In Chihuahua, Durango, type of control of land in the country. See Vélez y DeCoahuila and Jalisco this protest reached violent la Torre (1993).6
  4. 4. Chiapas. However, polarization and organization Authority is the legitimate exercise ofare two non-economic factors that are at the base power; it is a structure of rights through which 8of social rebellion. In the indigenous the actions of others are controlled. Strictlycommunities since the 1960’s, social groups that speaking, and according to this definition, theinclude the Catholic Church, Maoist activists, EZLN did not represent a serious threat to theindigenous groups defending property rights, power of the Government, since its military 9credit unions, civil rights activists, ejidal and force was rather small. However, it was anpeasant organisations and external political important challenge to the legitimacy of thegroups increased amongst the indigenous Government. The disavowal of its right tocommunities an awareness of property, labour and control, threatened to spread beyond Chiapascivil rights and developed the foundation for and undermine the consensus on whichcoherent social movements. national authority rests; widespread sympathy Although the actual date of creation of the and receptivity towards the ZapatistaEZLN remains unclear, the fact is that the movement pointed in that direction.organizational basis for civil violence was But why is a government’s legitimacy topresent well before the 1994 uprising, possibly control revoked by force? There are at leastsince the mid-1980’s. The strength of the three possible explanations to this question:mounting social protests in Chiapas was declining economic conditions, the frustrationincreased by elements resulting from the 1982 of expectations and the redistribution of 10incursions of the Guatemalan Army into Mexico power.and by the Central American crisis, all of whichproduced an increase in the militarization of theregion and indiscriminate political repression. DID SOCIAL REVOLT OCCUR WHEN ECONOMIC 6By the early 1990’s the presence of the Mexican CONDITIONS WERE DECLINING ?Army and the appointment of Governors withlittle regard for human rights, had blocked the Common sense suggests that civil violence ishopes of attaining a peaceful economic reform or more likely to occur when the living conditionsa political change in the region. Conditions had of a given population are deteriorating. Authorsdeteriorated to such an extent that in January like Marx considered that the descent of the1994 the EZLN rose up in arms against the people’s standard of living, would increase theGovernment. probability of social rebellion: the escalating impoverishment of the proletariat under capitalism would lead workers to becomeVIOLENT R EPUDIATION OF AUTHORITY conscious of their interests and revolt. However, in Marxs case and in other instances –like theIn essence, the Government’s authority over a French Revolution, the student riots in 1968, thespecific region of Chiapas was violently overthrowing of the Sha in Iran, the post-Stalinistdisowned by the 1994 Zapatista movement.However, if we take into account that the EZLN Liberacion Nacional in September 1997, confirm theis not just a local movement but also the wider impact of the rebellion.embodiment of a broader protest, its challenge, 8 See Coleman (1990 p. 466, p.68): "Authority systemsin the national context, meant the repudiation of are structures of rights. Those rights have the socialthe authority of both Local and Federal character that all rights have: They exist through a 7Governments. consensus of the relevant actors, that is, all those who are part of the system. In the case of an authority system, this consensus is what we meant by legitimacy of-------------------- authority". Coleman identifies government authority as6 As Serrano (1997, p. 91) points: " In an important an involuntary transfer of rights from the individual tosense, the interplay between peasant protest and other agents because, in general, individuals are borngrassroots repression bolstered the radicalisation of in societies where a consensus on rights already exists.the movement, tilting the balance in favour of armed If rights to control actions are held by the person, thisresistance". allocation of rights is self policing "...because it places7 The fact that the Zapatista revolt goes beyond rights of control in the hands of that actor with de factolocal demands is confirmed by the introduction of control.... But that is not true for any otherproblems like national democracy, NAFTA and allocations...In other words, authority that is notConstitutional Reforms in the early stages of peace voluntarily vested by an actor in another must benegotiations. But even without the self-proclaimed backed by coercive power if it is to be enforced". 9national character of the Zapatista movement, Only five out of more than 2395 municipiosmassive demonstrations and meetings, like the (municipalities) in Mexico were briefly occupied byConvencion Nacional Democratica, held in August zapatista forces. 101994, or the formation of the Frente Zapatista de See Coleman ( 1990, pp. 470-502) 7
  5. 5. Figure 1 Real GDP and private consumption per capita growth rates (%) 6 5 4 3 2 1 0 1989 1990 1991 1992 1994 1993 -1 GDP per capita Private consumption per capitaSource: OECD (1997), CEPAL (1995)dissidence in the Soviet Union, the workers showed an improvement in living conditions.movement in Poland in the 1980’s and the South Table 1 presents several measures of the standard of 13African rebellion– this hypothesis has received living before and during the year of the Zapatistalittle factual support since sometimes an uprising.improvement in economic conditions precedessocial uprisings. When poverty rises, the Table 1population appears to sink into increased Standard of livingpassivity. However, does the decline in 1984 1989 1992 1994 indicators*economic conditions explain the Zapatista National income per capita 397.67 485.69 565.91 603.29uprising? Did living conditions worsen in National consumption 286.75 435.99 504.56 522.65Mexico just before the EZLN revolt? expenditure per capita Although the Salinas Administration had a Rural income per capita 241.51 258.57 231.41 244.75disappointing record of growth, it did manage, Rural consumption 172.56 236.14 221.1 216.51 expenditure per capitaalmost every year (see figure 1), to get real Poverty (individuals,increases in GDP and private consumption per - - 52.6 55.6 official method) 11capita . In 1993 GDP per capita growth was a Extreme poverty (individuals, official - - 22.5 21.1mere 0.1% and private consumption per capita method) 12fell 0.3% . Nevertheless, it is unlikely that such Rural povertysmall changes in GDP and in private (individuals, official - - 65.0 72.0 method)consumption per capita deteriorated living Rural extreme povertyconditions drastically and generated the rebellion. (individuals, official - - 35.6 36.8If this hypothesis were true, the 1984-1989 method)period, when GDP per capita fell 4.8%, would Human Development 74.8a 75.7b - 77.1c Indexhave been a much more likely time for civil Source: Cortés et al. (2002) and my own calculations withviolence. information from ENIGH, 1984-89, INEGI. UNDP (2003) Information at household level, which * Income and expenditure in 1994 pesos.computes available net income, non-monetary a- 1980 b-1990 c-1995consumption and other development indicators The picture that emerges from this data-------------------- does no correspond to an astonishing economic11 Figure 1 shows the evolution of GDP and catastrophe that would be likely to provokeconsumer spending per capita calculated using thenew 1993 base. This base uses new weights for -------------------- 13output by sector, it is not just a price adjustment. In August 2002 the Mexican Government announced12 OECD ( 1996) calculated with the GDP base an official method for the measurement of poverty. In1993 and a population growth rate of 1.8% Table 1 extreme poverty is obtained in the officialaccording to ECLAC (1995). Quarterly data shows method with the lowest poverty line. The Humanthat GDP per capita fell 5.96% from the second to Development Index is the simple average of lifethe third quarter, but grew 8.6% towards the end of expectancy, educational level attained and GDP perthe year. However, such sudden changes are capita indicators, and in Table 1, HDI is calculatedexplained by production seasonality. using the same method each year.8
  6. 6. civil violence. The information shows a weak through unemployment or real incomebut steady economic recovery in consumption indicators.and expenditure; even extreme poverty Another form of frustration involves relativediminishes before the beginning of the revolt. deprivation as when there is a rapid improvementFrom 1984 to 1994 real income per capita grew in the economy some conditions improve more51.7%, real consumption per capita expanded rapidly than others. Those for whom conditions82.2%, although general poverty increased 3 are not improving very quickly see others doingpoints. It is important to point out that rural much better and they feel left behind; frustrationpoverty, general or extreme, increased from emerges which leads to a revolt. To detect1992 to 1994. On the other hand, the Human relative deprivation, the evolution of a group’sDevelopment Index (HDI), which measures the economic conditions should be compared to theaverage achievements in a country with respect average or to the conditions of other longevity, education and standard of living, A final form of frustration arises whenincreased 1.8% from 1990 to 1995. improved economic circumstances lead people to expect a parallel increase in political power, an advance that does not materialize. From thisFRUSTRATION OF EXPECTATIONS? perspective, the divergence amongst the different aspects of personal conditions is alsoAn alternative explanation to armed rebellion responsible for creating the gap between actualcorresponds to increased frustration. The and expected outcomes. Political repressionsubjective perception of those subordinated to amidst a period of economic recovery is anauthority, which differs from the outlook of indicator of this kind of inconsistentexternal observers, is the focal point of this expectations.hypothesis. From the point of view of those A weakness of the frustration theories ofinvolved in a revolt, things are getting worse, revolt is that frustration is a characteristic of thewhile that of the external observers’ is that they individual while a rebellion is a socialare improving. Aggression would be the phenomenon; simple congregation of frustratedoutcome of falling short of an expected result, a individuals does not account for organizedsituation that, in turn, would lead to revolt. revolt. An armed response to governmental There are several ways to define the kind of authority, such as the EZLN uprising, is not thefrustration that would lead to disowning sum of spontaneous individual riots, but theauthority. In the first place, an improvement in outcome of a highly organized and carefullyeconomic conditions brings about rising planned social movement. However, frustrationexpectations, since the possibility of an improved could account for the population’s response to astandard of living seems to become something revolt.real. But, people’s expectations grow at a faster Organized leadership creates therate than their actual living conditions. As a opportunity for a social uprising, but theconsequence, the gap between prospects and the probability of supporting, or even participatingobjective state of affairs widens resulting in people in a revolt, would depend on the level ofviewing reality with increased frustration. frustration of expectations. Frustration is aAlthough, this emotion originates with a simple requirement at the individual level for a revolt todiscrepancy between expected outcomes and occur or for supporting the rebels. But, theresults, it can be compounded with the fact that question is, was there growing frustrationthe authorities could be behind the creation of amongst the population just before the Zapatistaunfulfilled expectations. If this is the case, the uprising?discrepancy between the Government economic It could be said that the Salinasforecasts and actual performance would be an Administration was a period of increasedindex of the kind of failure of expectations expectations. After a closely-contested election,mentioned. Salinas lost no time in offering results that backed A situation which creates a gap between his market-oriented promise of economicexpectations and objective conditions is a development. In 1990, the Brady Plan helped tosecond form of frustration that occurs when a reduce foreign debt and from 1989 to 1992 theshort-term setback, such as a recession or a fiscal deficit was turned into a surplus:sudden rise in prices, interrupts economic macroeconomic policies eliminatedrecovery. From this perspective, price or hyperinflation, the deregulation of domesticquantity shocks are searched for in a period of economic activity was broadened by thegeneral economic development just before the Government and, from 1990 to 1991 foreignrevolt; this kind of setbacks could be detected 9
  7. 7. investment more than tripled. Indeed, the significant change in private investment. On theprospect of economic stability and structural other hand, the idea of gradual and futurereform brought massive amounts of foreign improvements in labor-intensive industries wascapital, strengthening the view that there would introduced by NAFTA negotiations, but, for abe fewer constraints to financing future time, private investment was held up awaitingeconomic development. the ratification of the agreement by a new U.S. Other reforms achieved mixed results. For Administration.instance, several Tax Reforms reduced the fiscal In Mexico, Salinas present image isburden on middle income groups, such as the severely tainted by the record of his last year in1993 cut in VAT, a purchase tax that excluded office: the guerrilla uprising, politicalfood; however, the tax base was extended. assassinations and his contribution to theThus, the future benefits that people expected “December Crisis”. Allegations of corruptionfrom this Fiscal Reform became part of the did not improve his reputation. However,rather abstract idea of healthy public finances. before the Zapatista rebellion, SalinasAnother example was PRONASOL, which Administration was very successful in raisinggradually increased social spending policies for expectations and in convincing Mexicans andthe poor, but whose target was erratic as the foreigners to risk their resources on them. Itlimited resources of the program and its lack of seemed that only a momentous shock, whichexplicit criteria for selecting recipients, caused was nowhere in sight, would prevent thepersistent uncertainty amongst possible Mexican economy from obtaining the necessary 14 15beneficiaries. resources to achieve continuous growth. Figure 2 Source: OECD (1997) The collapse of oil prices in 1982 and 1985 was a determining factor in the sudden A final group of reforms brought more changes that occurred in economic variables.expectations than results, such were the cases of During those years the Mexican economythe Agrarian Reform and of the North American received severe shocks in its terms of trade thatFree Trade Agreement (NAFTA). The 1992 resulted in the deterioration of fiscal and debtReform of Article 27 purported to inject a imbalances. However, no such changessignificant amount of new investment into the occurred during the Salinas Administrationagricultural sector by protecting and increasing and such sources of potential instabilityproperty rights, but the reform did not yield a disappeared. On the other hand, the--------------------14 PRONASOL did not publish its objectives and -------------------- 15policies as other Government programs did. It did It is symptomatic that well-argued warnings ofnot disclose detailed information about the unsustainable current account deficits did not have aallocation of resources until its last year of significant effect on foreign investment until it wasoperation. too late.10
  8. 8. combination of a more open economy and Table 2adverse terms of trade generated price shocksparticularly in the agricultural sector, which Frustration indicators 1984 1989 1992 1994was already falling behind behind the rest of the GDP growth gap -0.6* 0.2 3.5 3.2economy (see Figure 2). Coffee prices (dollars per 1.456 0.892 Setbacks in the terms of trade clearly pound) b d 0.633 0.699fexisted before the Zapatista movement, but National open unemployment 4.4 2.8 3.8 3.9they were minor compared to the 1986 terms of 16 Income share of the pooresttrade shock; it is difficult to attribute social 20% (national) 4.83 4.39 4.28 4.35revolt to such changes. More important was the Income share of the poorest 5.36 5.38 5.47 6.13relative deprivation of people related to 20% (rural)agriculture, since Constitutional changes to Relative political power 100a 98.6c 101.6 102.8fproperty rights and the negotiation of NAFTA Relative human 217,0 N/A 100e 189fintended to foster rural development and labor- rights complaints** 0intensive production. Real earnings of peoplein the agricultural sector, were relatively lower Source: My own calculations with information from PND, CEPAL, ENIGH-INEGI, Foweraker (1995), OECD andthan in any other sector. In this light, it makes National Commission for Human Rights..sense to consider the Chiapas uprising as part * Based on the 1982 estimate of economic growthof wider rural discontent as expectations were **1989=100 a-1983, b-1985, c-1987, d-1990, e-1991, f-1993consistently generated and frustrated. Other indicators show additional groundsfor increased frustration (see Table 2). Relative deprivation in agriculture was a sourceGovernment forecasts at the beginning of the of frustration, but it is important to comment that it did not translate into the relative declineSalinas Administration considered a gradualincrease in GDP growth. However, the gap of the poorest 20% of the population. Frombetween expected growth and actual growth 1992 to 1994 this group increased its realwidened. In 1993 the National Development income 1.6 points above the national average.Plan fell short by almost 6 points in its forecast Thus, relative deprivation is not an evidentof actual growth. On the other hand, one of the phenomenon since, according to some methodsfactors frequently associated with the Chiapas of measurement, in fact, even decreased.uprising, as shown in Table 2, was the drastic Another tool that provides information that contradicts the hypothesis of increasedfall of coffee prices from 1985 to 1992.Although, these picked up slightly from 1992 frustration is the evolution of the Index ofto 1993, the result was ambiguous since, Political Power in relation to economicalthough some relief was brought to coffee conditions. To construct this Index, the 18producers, the increases probably did not live recoded Humana Index of Political Rights isup to their expectations. divided by the GDP Per Capita Index; from A decline in employment was another factor 1987 to 1993 there was a relative increase inassociated with frustration. The end of a brief political and civil rights. There was no stagnation of gains in political power amidrecovery (1989–1991) raised urbanunemployment rates to 3.7% in 1993; economic recovery, on the contrary, whenunemployment in the rest of the country showed economic growth was very low, there wasthe same trend. The 2.3% annual increase of slight progress in the protection of politicalpopulation that reached working age plus a rights.growing participation rate in the labor 17market resulted in a growing number of --------------------people frustrated by the lack of employment 18 The Humana Index is calculated by scoring fortyopportunities. questions on political, civil and social rights. All Humana questions are drawn from the Universal Declaration of Human Rights. The recoded Index includes only civil and political rights as freedom from torture, freedom from serfdom, freedom from political censorship and freedom for multiparty elections. The maximum score is 100 for complete protection of rights (See Foweraker, 1995). The GD P-------------------- Per Capita Index is calculated according to the 198016 That year oil prices fell 24.3%. base. The Index of Relative Political Power is set at17 Participation rates rose by a strong 0.5 points per 100 for 1983. For 1993 the Humana index of 1992 isyear between 1991 and 1995 according to OECD used assuming no changes in political and civilcalculations. rights have occurred. 11
  9. 9. Another indicator of relative political governmental authorities is usually dearlypower is the number of complaints related to paid for by the leaders of the revolt, althoughhuman rights violations per capita divided by not so much by the rest of the rebels.the GDP per capita. The Relative Human The benefits of participating in organizedRights complaints index shows an actual civil violence are those associated with thedecrease from 1992 to 1993 confirming that change of regime. Some examples of this are:before the Zapatista uprising, there was no loss increased economic resources, redistribution ofof civil rights with respect to economic existing income and wealth, political power orperformance. legal concessions. These benefits are almost There is no uniform trend in frustration independent of an individuals participation inindicators. There is evidence of rising the rebellion. However, a second set of rewardsexpectation and price and quantity setbacks, but such as a position in the new structure ofit is difficult to conclude that there was an authority does depend on the individualsimbalance between political power and economic participation in the revolt and on its success.conditions. On the other hand, relative This type of rewards are scarce and selectivedeprivation increased but it was a phenomenon and are not widely inclusive; it constitutes therelated only to a particular sector, not exclusive set of reciprocal reinforcements of individualsof the national or rural poor. acting together and sharing the same goals that promote wider, collective action. Ideology provides the setting that allows closelyREDISTRIBUTION OF POWER associated individuals to generate rewards that are not conditioned by the expected success ofA third explanation of social revolt defines the revolt. This last kind of benefits involvesorganized rebellion as a rational action lower costs and adds to the subjective rewardsdependent on the expected net gains resulting of working towards the realization of thefrom engaging in civil violence. In turn, the common vision.expected net gains depend on the costs of Some rebellions become revolutions withparticipating in social rebellion, on a mass participation, but the activists of organizedsignificant change in political and economic civil violence usually constitute only a smallconditions being gained when governmental part of the population. This set of individualsauthority is successfully challenged and on the not only finds a net benefit in snatching the rightperceived probabilities of such success. It is to control their actions away from therational for an agent to engage in social revolt government but also in investing time andor at least to support it when net gains resources in building and expanding anobtained from disavowing authority and the organization capable of finding an alternative toprobability of successfully doing so are high the actual exercise of authority. This net benefit The costs of participating in a rebellion are surpasses the net gains of continuing to regardthe time and resources sacrificed in order to the actual power structure as legitimate.join organized violence; these opportunity- Authority is divested when individuals nocosts are generally low for those in extreme longer believe that a government can, or will,poverty. However, a more important set of provide a social order that generates andcosts involves the penalties enforced by the distributes beneficial rights and economic resultsauthorities, or by their supporters: arrest, of a superior nature than those that a successfulconfiscation of resources, torture or even dead revolt can probably provide. 19may be the price paid for armed rebellion. The estimated probability ofThese possible consequences usually generating an actual change depends ondiscourage individuals in extreme poverty, how the power of the rebel force againstas they tend to be more averse to risks that of a government is perceived. Thisthat could result in potential losses or that power, in turn, depends on the number ofcould endanger their lives. 20 Another individuals that find a net gain in theirconsideration is that, if the rebellion is investment in the rebellion and inunsuccessful, the expected punishment by challenging authority; as contagious effect can be generated if a great many persons join the revolt. On the other hand, if a--------------------19 These costs may be low in the initial stages of the government is perceived as weak in itsrevolt if public opinion curbs human rights exercise of power, the estimatedviolations or the use of force to confront the rebels. probability of a successful revolt increases;20 See Levy (1994, p.67)12
  10. 10. not only its net gains look more attractive the basis for revolts. In organized civilthan those of the vacillating authority, but violence, even when dissatisfaction isalso its punitive ability is seen as decreasing, if there is a credible threat todiminishing. The relative net value for a given governmental authority, there will beprobability of success is hoisted by both these grounds for support and involvement. Afactors as it nourishes itself in that this feeling of frustration will persist if even inperception in turn increases the number of the presence of a strong challenge, theindividuals willing to participate and invest in regime remains in power. However,the revolt and this again raises its estimated frustration and redistribution of power areprobability of success. better seen as complementary explanations Taking into account the above for rebellion. This view regardsexplanation, an improvement in economic insubordinate actions as the product ofconditions might increase the revolts dissatisfaction with the existing social orderperceived chances of success for it would add and the belief that revolt against it will bepower and resources to those attacking the successful, but frustration by itself is notstatus quo. The effect of improved conditions the cause of organized civil violence. So themay be as well to strengthen the belief in the question that now arises is: Are therepotential success of those opposed togovernment authority among the population grounds for believing that before theas a whole, unless the improved conditions Zapatista uprising took place, the potentialgreatly reduce dissatisfaction and thus net gains of a revolt were increasing byundermine the evaluation that the regime is comparison to the those provided by theworse than one that might replace it. From status quo maintained by the Government ?this perspective, it is not important for the There is ex post evidence that the existingrebels to convince the entire population of the conditions were adequate for the EZLN tobenefits of an alternative regime, but rather to emerge. The costs of the rebellion in the firstmake certain that they themselves are regarded year of its uprising were significantly reducedby the population as powerful. Popular by decreasing poverty, additional resources forsupport will flow, not on the grounds of ethic low-income groups, a more active humanconsiderations, but on the actual possibilities rights defense and the pressure of national andof gaining the right to exercise legitimate international public opinion. The highly 21power. What matters in a social revolt is the organized nature of the EZLN consisting ofpeople’s belief regarding the relative power of "professional soldiers", an army of peasants, thethe antagonists and about what will happen if Comité Clandestino Revolucionario Indígenathey support one side or the other. However, (Clandestine Indigenous Revolutionary 22how the general population feels about the Committee) and a Communal Assemblyrevolt is not irrelevant, since it will determine shows a lower opportunity cost for investingif the rebels are able to move freely within the resources in the rebellion. On the other hand, aareas of conflict; to achieve unimpeded actions world-wide press coverage of the militaryonly passive support is necessary, not the mobilizations in Chiapas prompted a stop tosharing of abstract goals. an armed "solution" that was led by human The theory of redistribution of power can rights concerns and by pressures brought on bydispense with the explanation of frustration as public opinion. Two weeks after the uprising, the Federal Government conceded a "unilateral truce" that formally reduced the sanctions for the rebel forces that took part in the conflict.--------------------21 Why did the EPR not win as much popular The costs of participating in the revolt did notsupport as the Zapatistas? Both movements emerged vanish as the Government broke the truce inin poor States and involved similar claims. One February 1995. However, in 1996, a lawelement that could explain this phenomenon is the granting amnesty to rebels willing to negotiaterelative weakness of the new rebels in comparison to and withdraw from the armed conflict wasthe EZLN. At the beginning of the social uprising, decreed. The costs of an unsuccessful rebellion,the Zapatistas invaded four municipalities, declared if the rebels surrendered, were practicallywar on the Federal Government and established astronghold in the Selva Lacandona (Lacandonan reduced to zero by this law.Jungle). EPR actions, on the other hand, wereintermittent and geographically disperse. It did notembody a credible threat to governmental authority -------------------- 22and also were not regarded as a viable alternative to See Gunther Dietz (1995) for a more detailedthe exercise of legitimate power. accountof the organizational nature of EZLN. 13
  11. 11. The benefits of revolting also seem clear ex Ex post, the characteristics of the revoltpost: six weeks after the Zapatista uprising, the were consistent with the redistribution of power 24Federal Government was at the negotiating table theory . But what about ex-ante indicators?during the Jornadas por la Paz y la It is very difficult to gather data regardingReconciliacion (Conference for Peace and the costs and benefits of a prospective revolt.Reconciliation) with 32 proposals in reply to the Not only there is little evidence about the 2334 initial demands of the rebels . A special office actual expenses and expected returns of a socialthat would hear indigenous claims was set up, uprising in its stages of formation, but much ofand in 1995, the share in poverty-reduction the information, that influences the decision ofexpenditure for Chiapas was almost doubled. The an individual to participate, is subjective.Government was ready to discuss legal changes Which is the set of rewards that potentialfor the indigenous communities, an Agrarian rebels perceive as an alternative to theReform at a national level, and new electoral and economic and political status quo? Howjustice laws at a local level. The San Andrés much relative power in the revoltingLarrainzar Accords included the autonomy of the coalition is apprehended by individuals?indigenous communities. In 1997, in a mass However, if the theory of redistribution ofdemonstration in Mexico City the creation of the power aspires to be more than an ex-postFrente Zapatista de Liberación Nacional rationalisation of organised civil violence, it(FZLN) (Zapatista Front for National must justify itself with, at least, someLiberation), the political branch of the EZLN, indirect evidence on the probability of awas announced; several supporters of the revolt.Zapatistas, who at one time had been jailed,became leaders of the new organization. Theuprising obtained the Government’s non- REBEL IDEOLOGY, RELATIVErepressive attention, resources, legal concessions, DEPRIVATION AND POLARIZATIONpolitical power and the necessary conditions fordeveloping ideological ties amongst their Under reasonable assumptions, incomesupporters. distribution indicators, albeit not the It was now obvious, that the EZLN had the traditional ones, can provide indirectcapacity to mobilize men and resources for violentand peaceful tasks. From the initial military information about the expected economicmobilizations to the creation of the FZLN, the gains of a revolt and its probability ofZapatistas image was that of a unified group happening. The starting point is the ideawhich had become a powerful challenge toauthority. Even though the militarily capabilities --------------------of the Zapatistas were no match for the Mexican 24 There is more evidence that conforms to theArmy, it was clear that the charisma of EZLN redistribution of power theory. Coleman (1990, pp.was able to attract press coverage and public 500-502) indicates that the rebels optimal strategyattention, thus, drastically reducing the involves early success in displaying power; severe punishment for acting in support of the other side; notpossibility that force would be used against them. engaging in indiscriminate terror; demonstration ofWeaknesses in Government policies in detecting the weaknesses of the authorities; seeking externaland dissolving the rebellion, are evident today: support; an utopian ideology that challengesthe National Security co-ordination was impaired authority; incorporation of existing grievances of thewhen an experienced Secretary of the Interior, population into proposals and isolation of potentialFernando Gutiérrez Barrios was replaced in 1993 recruits from non-supporters. The EZLN actions follow this pattern: it began by the spectacular takingby a former Governor of Chiapas, Patrocinio of five towns simultaneously, two days later itGonzález. Even after several Zapatista training kidnapped the former Governor of Chiapas, Absalóncamps were detected by the Mexican Army Castellanos, it judged him and declared him guilty ofseveral months before the uprising, Government crimes against the people, but instead of executingIntelligence had no coherent picture of the nature him, he was released; the authorities appear to beof the movement. The power of the Zapatista unable to identify, locate and attack the zapatista forces and, when they do, national and internationalmovement and the weaknesses of the Government media and public opinion prevent military actions;resulted in a rebellion with probability one. the Declarations of the Lacandonan Jungle and-------------------- several of Marcos’ letters provide severe criticism of23 The resignation of President Salinas, as originally the Government, justify civil violence and demanddemanded by the Zapatistas, was rejected and the widely- supported social and economic changes.reply to their demand for effective and democratic Finally, when the movement became under attack, itnational elections was that both aspects of Mexican withdrew to a region with a high degree of closurepolitical life were already in progress. within groups of supporters.14
  12. 12. that the probability of a revolt depends on the costs of collective action. Besides, thethe number of individuals that find a positive presence of groups with substantial intra-expected net gain in rebelling. The expected group homogeneity and inter-groupnet gain is the alternative income multiplied by heterogeneity reduces the costs of articulatedthe probability of a successful revolt, minus the rebellion and of generation of tensions. Aactual income weighted by the probability of society divided into two well-defined andfailure. Rebel ideology contains, among other separate coalitions, exhibits a high potential 25things, a proposal for an alternative income for social conflict. The implications of thesedistribution that maximizes the size of the arguments are that an index of dissatisfactioncoalition that finds a positive net gain in with the present income distribution and anorganized civil violence. On the other hand, indicator of the importance of the middlegovernment authorities could reply by setting classes are good proxies for the probability ofpenalties or re-distributive rewards that revolt.minimize the net gains of engaging in An initial way to think about relativerebellion. deprivation is to consider dissatisfaction with The above set of conditions indicates that present income distribution independently fromrebel ideology, in order to recruit potential any proposed option. From this point of view,members, will have to make known in an individual is relatively deprived with respectadvance, a progressive, re-distributive to other individuals if that person has lessproposal. If the “middle” classes are small, income than the others. However, a personantagonistic coalitions will form more attaches more weight to comparisons withquickly. The progressive, distributive individuals who have a similar income;proposal will generate dissatisfaction with comparisons with extremely rich persons carry 26present income distribution among low- little weight. Total relative deprivation felt byincome groups who, if they join the revolt and an individual amounts to the sum of all incomethe revolt succeeds, will obtain rewards. The differences perceived. The degree of relativecomparison between the status quo and the deprivation in a society as a whole, is the sumexpected gains of a revolt arouses relative of the total relative deprivation of alldeprivation feelings that fuel frustration and a individuals belonging to it.predisposition to rebellion. On the other hand, Social relative deprivation is zero ifthe formation of a coalition becomes easier if a there is an equal income distribution.cluster of low-income, potential rebels exists. Because deprived individuals only compareA redistribution proposal will divide a broad, to one extremely distant person, totalmiddle-income class, as some will support the relative deprivation is very low ifrebellion and some will not, and some will be maximum inequality exists, that is to say,undecided, which will weaken collective that one person has all the income andaction. If income distribution is polarized, the the rest of the individuals have nothing.middle class will play a minor role in For a given total income, maximumstopping the formation of a coalition. On relative deprivation exists when half thesimilar grounds, John Roemer (1985) has population has no income and the otherdeveloped a model of revolutionary activity half divides the total income equallythat concludes that if a revolt is highly amongst them. In this last case, we haveprobable, then the optimal rebel strategy is topropose a progressive income distribution. the maximum number of comparisonsFurthermore, if rebellion is highly probable, itis because it is highly polarized: the --------------------undecided middle class disappears. 25 Podder (1997, p.372) indicates that "Obviously, There are additional reasons to when relative deprivation is maximum in theconsider relative deprivation and society, discontent is also maximum and this is thepolarization as indicators of potential stage at which the probability of a social conflict i s the highest". Esteban y Ray (1993, p.5) add: "...therevolt. The comparisons between “haves” more polarized a society is, more probable is thatand “have-not’s” generate discontent, interest differences lead to an open conflict."envy or feelings of unfairness in a society. 26 Individuals tend to compare with the referenceEnvy is a powerful emotional force behind group with which they interact. Dissatisfaction issocial upheaval and shared perceptions of mainly elicited when the next-door neighbor commands a greater quantity of resources, not whenunfair treatment facilitate the formation of the position of someone, socially or economicallycommon ideological beliefs that decrease distant, improves. On this point see Podder (1997, p. 358-359). 15
  13. 13. between the “haves” and “have-not’s” with antagonism exist. If maximum inequalitynot very different incomes. occurs, then polarization is very low since one On the other hand, polarization means the individual gets all the income and the rest ofpresence of significantly-sized population society gets nothing. In this case, most of theclusters, such that each cluster has members individuals would identify with each other andwith similar characteristics, but different feel alienated in respect to only one person.clusters have members with dissimilar Maximum polarization exists when half ofcharacteristics. Society is an amalgamation of society is in a zero-income class and the othergroups in which high polarization occurs when half divides the total income equally. In thisthere is a high degree of homogeneity within case, the minimum number of groups achieveseach group, a high degree of heterogeneity maximum identification among the groups andacross groups and a small number of maximum antagonism across the groups. Thissignificantly-sized groups. Isolated individuals last situation means the dissolution of theor groups of insignificant size carry little middle class into rich and poor income 27weight, since the interest is on organized, categories.collective action and not spontaneous, singular When there is an equal incomeexpressions of social exclusion. In this distribution, relative deprivation, polarizationperspective, individuals feel identified with and inequality are at their lowest. Maximumthose who have similar incomes, if there is a inequality generates low, relative deprivationlarge number of persons in the same income and low polarization. Maximum relativeclass, and feels alienated from others whose deprivation and maximum polarization emergeincomes are different. Because alienation with an intermediate degree of inequality, whendepends on income differences, low-income society divides equally between the “haves”individuals feel estranged from rich individuals and “have not’s”. Clearly, relative deprivationand vice versa. The effective antagonism of an and polarization can move together, and veryindividual against others, depends on the differently, than inequality. However, relativedegree of identification or alienation that person deprivation and polarisation are differentfeels towards them. Total polarization is the phenomena. Relative deprivation measuressum of all effective antagonisms. dissatisfaction with present income distribution If there is an equal income distribution while polarization captures the relativeamong individuals, all members of society importance of the middle class.belong to the same income class and identify Recently, different sets of axioms andwith each other, therefore, no alienation or descriptive techniques provided several relative Figure 3 Inequality, relative deprivation and polarization indicators 60 50 40 30 20 10 1984 1989 1992 1994 Gini Podder Relative Deprivation Index Wolfson Polarization IndexSource: My own calculations with information fromENIGH, 1984,1989,1992,1994, INEGI.16
  14. 14. deprivation and polarization measures: 1992 to 1994. Finally, after an importantPodder’s Relative Deprivation Index, increase from 1984 to 1989, inequalityWolfson’s Polarization Measure and the family remained relatively stable from 1989 to 1994.of polarization indicators by Esteban and Ray From the Podder and Wolfson indexes itare examples of this. However, they are only is possible to conclude that a combination ofapproximations of distribution dissatisfaction relative deprivation and polarization precededand of the formation of antagonistic groups. On the Zapatista uprising. Although the indicatorsone hand, present relative deprivation must be moved sharply in the key period 1992-1994, acompared with the one that would exist with more careful analysis is needed to appraise thean alternative income distribution. On the other joint importance of these factors.hand, the population clusters weighted by Table 3 provides additional informationpolarization measures do not necessarily on the deepening of relative deprivation andcoincide with those with actual positive, net polarization. At a national and rural level,gains obtained by engaging in civil violence. from 1984 to 1994, the poorest 70% of theSince alternative income distribution proposals population obtained less than the averageand potential rebel coalitions are hard to detect, income, while the richest 30% earned morerelative deprivation and polarization measures than the average income. The relativeare used for this purpose. income of the poorest group approached Figure 3 shows data on the evolution of the degree of relative deprivation. Thisinequality, relative deprivation, and polarization as measure clearly shows a widening gap betweenmeasured by the Gini, Podder and Wolfson the less-than-average income population and itsindexes. complement. On the other hand, the income The Gini coefficient is a standard share of the intermediate 60% of the populationmeasure of income inequality that ranges serves as an indicator of the decreasing relativefrom zero (perfect equality) to one importance of the middle class. The trends were(maximum inequality). The Podder index different for rural areas in the 1992-1994 period.measures relative deprivation using a However, these indicators are still crudelogarithmic weighting of incomes, and approximations to the notions of relativeranges from zero (perfect equality) to one deprivation and polarization. The Esteban and(maximum relative deprivation). 28 The Ray family of polarization indexes provides a 31Wolfson index measures polarization more precise measure of this phenomenon.according to a Lorenz curve The Esteban and Ray simpletransformation and it ranges from zero polarisation index uses absolute income(perfect equality) to one (maximum differences to measure antagonism andpolarization). 29 The salient feature of this population frequencies to incorporatedata is the very high, polarization index that intra-group identification. It is similar in 30increases 13.7% from 1984 to 1992; from its conception to the Wolfson index, and1992 to 1994 polarization posted a 6.14% ranges from zero (perfect equality) to oneincrease. On the other hand, relative (maximum polarization). 32 Although itdeprivation does not appear to be very seems very low, it is quite high whenhigh although it increased by 12.4% from compared to previous calculations of the same index. 33 Of particular importance is27 the fact that from 1984 to 1994 it In fact, as argued by Wolfson (1994, p.353), increased 5.8%. The Esteban and Raypolarization is a shorthand for the phenomenon ofthe disappearing middle class. polarization indicators are very versatile,28 Relative deprivation is calculated asRD=Σi Σj (lnIi-lnIj) for Ii>Ij and then divided by the -------------------- 31maximum level of relative deprivation M= [N/2]2 In order to more easily appraise their propertiesln[(2It/N)-1), where Ii is the income of the ith and extensions, the Esteban and Ray basic indexesindividual, N is total population, and It is total were derived axiomatically. 32income. Simple polarization is calculated as P s= 2Σi Σj29 The Wolfson index is (2-4Lm-2G)/(Im) where Lm P 2 i P j I Xi-Xjz I where Pi is the population shareis the accumulated income share of 50% of the of income class i and Xi is the income share ofpopulation and Im is the median income divided by income class i. This equation is very similar to thethe average income. one that defines the Gini coefficient, which i s30 Polarization is higher than inequality (so they can closely related to the Lorenz curve. 33be compared, both range from zero to one). Wolfson Esteban and Ray measure polarization of world(1994, p. 357) has reported for Canada labor income growth rates. For Gini coefficients, similar to thosepolarization indexes that range from 33.8 to 41.7. for Mexico, they obtain polarisation levels of 0.44. 17
  15. 15. allowing the incorporation of different relative deprivation and polarization indexesways of measuring social antagonism. If did not always change in the same direction,instead of using income shares in the from 1992 to 1994, they all pointed to aindex the natural logarithm of income is significantly increased possibility of a potentialused, the indicator becomes similar to the social conflict. When the key concept of 34Podder Relative Deprivation Index. This relative deprivation is not considered (the usecombined polarisation relative deprivation of the logarithmic scale means that individualscoefficient increased by 31.9% from 1992 to attribute more weight to comparisons with1994. persons of similar income groups) polarization Finally, the poor might feel alienated from always increases. The probability of anthe rich, but not vice versa, as sense of organized revolt grew from 1984 to 1994 as aidentification could depend on economic power. If result of the combination of relative deprivationso, it is possible to obtain a weighted index that with social polarization and the resources ofcaptures relative deprivation, the polarization of those with less income. It seems that incomethe poor and the potential resources that were polarization is the main economic ingredient 35invested in a conflict. This index is the main for civil violence.indicator of potential rebellion and steadilyincreased by 35.32% from 1984 to 1994. Table 3 IS CIVIL VIOLENCE A LOCAL PHENOMENON? Relative deprivation and 1984 1989 1992 1994 polarization indicators (%) Up to now, the Zapatista rebellion has been Relative income 161,0 185,0 190,0 193,0 (richest 30% / poorest 70%) 0 0 0 0 considered the expression of a national "Middle class" income share 45.67 42.06 41.54 41.12 phenomenon. But, should it not be considered (II-VIII quintiles) just a local movement disguised in pompous 147,0 151,0 147,0 142,0 Relative income (rural) 0 0 0 0 clothing? Perhaps in this light, poverty is the "Middle class" income share explanation of civil violence and not other 47.61 46.95 46.88 47.4 (rural) factors. The information available for several Esteban and Ray simple polarization index 1.82 1.89 1.9 1.93 poverty, relative deprivation and polarization 36 Esteban and Ray indexes at state level are presented in figure 4. 78.36 55.98 50.65 66.85 logarithmic polarization index The data clearly shows that from 1990 to 1995, Esteban and Ray weighted asymmetric 56.29 70.3 74.52 76.17 while polarization increased in Chiapas, logarithmic index (WAL) relative deprivation and extreme poverty decreased. This information is consistent withSource: My own calculations with information from the theory of redistribution of power and doesENIGH, 1984,1989,1992 and 1994, INEGI. not contradict the general results at a national level. Although it may be reasonable to A convincing conclusion can be consider that local polarization reinforced areached: although, from 1984 to 1994, national phenomenon and vice versa, it is difficult, in any case, to argue that a fall in the living conditions of the extremely poor triggered the revolt.-------------------- If local and national polarization reinforce34 This index is Ps=(4/Ln2Im)Σi Σj P 2 iPj I LnIi-LnIjI where Ln2Im is the natural logarithm of twice the each other, an interesting question emerges.average income, Pi is the population share of incomeclass i and LnIi is the natural logarithm of income of -------------------- 36individual i. This equation is very similar to the one This information is not strictly comparable to thethat defines the Podder relative deprivation index, previous indexes, since national census andexcept for the squared Pi and the fact that all household surveys do not use the same definition ofcomparisons between rich and poor are considered. income. However, although the level of the indexes35 The index weighs the comparisons between the differs, the broad changes they indicate are capturedpoor and the rich using the natural logarithm of by the data. It should be noted that since 1995income of a poor individual. Zero weight is attached incorporates the effects of the 1994 December crisis,to the comparison of a rich agent with a poor person. the indexes overestimate the extent of poverty,The index becomes Ps=Σi Σj P 2 iPj (Ln Ii)I LnIi-LnIj relative deprivation and polarisation at theI for Ii<Ij. In this case no homogenization of the beginning of 1994, so a note of caution is due beforeindex is done (the index does not range from zero to any interpretation. The only clear-cut result seems toone) so richer deprived agents in a polarized society be that extreme poverty did not increase in Chiapasare more prone to rebel. before the Zapatista uprising.18
  16. 16. Figure 4 Poverty, relative deprivation and polarization indicators in Chiapas 1990,1995 Esteban and Ray (WALI) Wolfson polarization index Podder relative deprivation index FGT2 extreme poverty 0 20 40 60 80 100 1990 1995Source: My own Calculations with 1990 and 1995 The more populated states exhibit theCensus data, INEGI. largest probability of organized civil violence. It is interesting to note that in 1995 OaxacaWhich states are prone to social conflict? The and Guerrero, two of the poorest states, wereanswer is found in Table 4 which shows the not among those more prone to social conflict.states with the larger indexes of relative However, in 1996 the EPR was active in thosedeprivation and polarization. The data includes 38 States. The explanation of a low Esteban andinequality and extreme poverty indexes that Ray WAL of potential revolt in Oaxaca andconfirm that these are not always associated with Guerrero was poverty. Those two states havehigh, relative deprivation and polarization. very high relative deprivation and polarizationStates were ranked according to the Esteban and 39 indicators , but the probability of revoltRay proposition that polarization in small decreased with a single index that combined thepopulations is less significant than among larger available resources of the polarized and deprived 37groups. groups. There is no information at state level for 1996, but it is possible that, at the beginning of Table 4 that year, the Esteban and Ray indicator rose State Esteban when the GDP regained positive growth rates. If Extreme distribution Gini poverty Podder Wolfson and so, it seems that the EPR uprising could have indicators coefficient index index Ray been triggered by economic recovery combined FTG2 1995 WAL Federal District 26.27 2.71 32.02 37.77 69.75 with very high relative deprivation and polarization. Mexico 33.13 8.67 48.38 84.21 56.8 Veracruz 41.52 16.26 66.65 81.94 61.26 CAUSES AND CONSEQUENCES OF RELATIVE Jalisco 35.13 10.75 53.06 83.93 53.78 DEPRIVATION AND ECONOMIC POLARIZATION Guanajuato 38.95 16.43 65.87 74.03 45.11 Nuevo Leon 26.26 6.21 41.74 45.94 63.73 It is beyond the scope of this paper to explain the origins of relative deprivation and economic Puebla 42.62 18.74 71.13 75.26 53.61 polarization as measured by the indexes 40 reported. However, there is a recurrent piece ofSource: My own calculations based on the 1995 Census --------------------data, INEGI. 38 EPR attacks were also reported in the States of Mexico, Guanajuato, Veracruz, Tabasco and Chiapas. The EPR declared that rebel forces were present in Mexico City; unidentified guerrilla activity was-------------------- detected in Puebla.37 39 Therefore, the WAL multiplied by population was For 1995, the Podder and Wolfson indexes are 78.10used to determine the ranking. See Esteban and Ray and 83.22 for Oaxaca, and 87.37 and 71.16 for Guerrero. 40(1994, p.848). Unlike inequality and poverty indexes, relative 19
  17. 17. evidence associated with a markedly economic low-education earners and growing income sharedivision of society: second only to economic of high-education earners.liberalization, human capital differences are the This relative distance between skilled andsingle most important variable explaining non-skilled labor also exists in the composition 41poverty and inequality in Mexico. Wages of the labor force. Table 4 shows wage earnersplay a key role in understanding not only the by occupation and their monetary income share.evolution of inequality and poverty, but also Wage earners with high skills and decision-relative deprivation and polarization. making jobs, sometimes called the “new 43 middle class”, represent a decreasing percentage Figure 5 Income earners and their income share by education levels Income earners with less 37% 36% than primary40 36% education% Income share of earners30 23% 24% withthan primary 21% less% 19% 20% 18% education20 Income earner with% higher education10 6% 6% 7%% Income share of earners 0% with higher 1989 1992 1994 educationSource: My own calculations based on information of the total population of income earners,from ENIGH, INEGI. however their share of monetary income has increased. Nevertheless, the gap is also growing Different analyses show that in recent years in other sectors of the work force: high-levelthe institutional and technological change of the executives, managers and administrativeMexican economy has substituted non-skilled coordinators make up an almost constant sharelabor by capital, thus, the demand for low of total earners whose share of total monetaryeducation and workers with little education and income has also increased while the income and 42experience decreased. The impact that this earners’ share of supervisors, professionals andsituation has had on the agricultural sector, with technicians has decreased.its low educational levels and a young andrapidly growing labor force, means that it will Table 5continue to lag behind the rest of the national 1989 1992 1994economy. There is a relative gap between average Wage earners and Earners Earners Earnerswage earnings and agricultural wage earnings, but their share of and and andthe gap between skilled and non-skilled labor is monetary income by income income income occupation shares shares sharesof a general nature. Occupation E I E I E I Figure 5 shows the relative stability ofincome earners composition according to High level officials and 1.3 3.1 1.9 10.4 1.5 8.8 managerseducation levels, the decreasing income share of Administrative 2.5 4.8 2 4.4 2.3 6.3 coordinatorsdeprivation and polarization indicators are not yet Supervisors 1.9 3 1.5 2.7 1.4 2.4open to decomposition analysis that will allow an Professionals and 9.5 16.6 5 10.6 6.8 14explanation of the relative importance of different factors Techniciansrelated to them. "New middle class" 15.2 27.5 10.4 28.1 12 31.541 Szekely (1997) decomposes various inequalityand poverty indexes to examine the causes of these Other wage earners 51.7 40.5 61.6 40.4 58.3 40.6phenomena and concludes that 73.3% of the increase Total of wage earners 66.9 68 72 68.5 70.3 72.1in economic inequality, from 1984 to 1992, isexplained by the differences in educational levelsand 52.0 of the changes in poverty arise because of Source: My own calculations based on information fromoccupational characteristics related to human ENIGH, 1984,1989,1992,1994, See Epelbaum and Cragg (1994). Dietz (1995,p.78) identifies the substitution of unskilled labor -------------------- 43by technology in Chiapas since the mid-1970’s. See Wrigth (1986)20
  18. 18. Figure 6Source: My own calculations based on Census data targeting error is the difference between a statesand data in the Presidents Report, 1990, 1995 share in national poverty and its share in total 45 poverty-reduction expenditure. No attempt is made to reduce the very Scott and Bloom (1996) detected that socialcomplex phenomena of relative deprivation and expenditure increased from 1990 to 1995.polarization to one single factor. However, as in Seventeen states reduced their targeting errors andthe case of poverty and inequality, the human the total sum of errors decreased. Table 6 showscapital returns contribution to the widening gap the target characteristics of poverty-reduction 46between skilled and non-skilled labour -and from expenditure. From 1990 to 1994 the Mexicanthere to a sharp break in society- makes aninteresting hypothesis to explore. The consequences of civil violence for detailed evaluation of targeting policies is notsocial policy are, perhaps, a more important currently available. 45 This is done for Levys (1994) extreme povertypoint than the origins of relative deprivation line of 16.61 dollars per person per month at 1984and polarization. The hypothesis in this case prices using the average free exchange rate. Theis that if rebellion does not depend on Foster-Greer-Thorbecke index with squared terms isincreased poverty but on the joint contribution used to measure poverty shares. Ravallion and Chaoof relative deprivation and polarization, social ( 1989) show that targeting by poverty shares is notpolicies oriented to respond to potential the optimal strategy (see Scott and Bloom 1997) . However, it is the easiest one and the one finallyconflict will then not coincide with an adopted by the Mexican Government.alleviation of poverty. 46 To measure the shares of targeting errors and the Figure 6 shows the targeting errors in general index, the sum of squared errors was used topublic spending for the reduction of poverty, attach more weight to the biggest mistakes. Thebefore and after the Zapatista uprising. A 44 index used is E= 1/2Σj I ei I2 , and e= FGTsi - Gsi. FGTsi is the poverty share of the state i and Gsi is-------------------- the expenditure share of state i. This index ranges44 Only targeting errors at state level are considered, from zero (perfect targeting) to one (all expendituresa situation that underestimates possible deviations are allocated to a zero poverty state). Mexico Cityfrom poverty targets due to intra-state errors. A was excluded from these calculations. 21