Starting point: economic development is intrinsically uneven.Contrast with theories based on convergence.Debraj Ray, “Unev...
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 th...
Uneven GrowthReactionsThe lives of others are on display:Aspirations and frustrations are socially generated.Unclear if th...
Uneven GrowthReactionsThe lives of others are on display:Aspirations and frustrations are socially generated.Unclear if th...
Uneven GrowthReactionsThe lives of others are on display:Aspirations and frustrations are socially generated.Unclear if th...
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 ...
The Salience QuestionUneven growth −→ conflict, but along what lines?Religion, ethnicity, geography, occupation, class?The ...
Directly Contested ResourcesLabor marketsEthnic or racial divisions, immigrant vs nativeAgrarian landRwanda, Darfur, Chatt...
Contestation ⇒ conflict between economically similar groupsSome counterarguments:bauxite/land in Maoist violenceagrarian/in...
Primordialism vs InstrumentalismInstrumentalist viewEthnic conflict could well be economic (as in Marx), butExpressed via n...
Are Ethnic Divisions Conflictual?Based on Esteban and Ray (AER 2011)Groups engaged in conflict over some combination of:Publ...
Predicted ConnectionsConflict over public goods related to polarization P.Conflict over private goods related to fractionali...
Empirical InvestigationFrom Esteban, Mayoral and Ray (AER 2012, Science 2012)138 countries over 1960–2008.C: PRIO.isc: Con...
[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(0.19...
And Economic Inequality?Lichbach survey (1989):43 paperssome “best forgotten”Evidence completely mixed.“[F]airly typical fi...
Economic Inequality and ConflictEsteban, Mayoral and Ray (in progress).Variable prio25 prio25 prio1000 prio1000 prioint pri...
Surprising? Not ReallyTwo entry points:Wealth of the rival group — related to the gains from conflict.Wealth of the own gro...
Uneven Growth: More to GrabSpilerman (1979) on 1960s race riots in the USThakore (1993), Das (2000) on 1992–3 Bombay and C...
Uneven Growth: Incentives to EngageMurshed-Gates (2005), Do-Iyer (2007) on poverty in Nepal.Honaker (2008) on unemployment...
An Illustration: Hindu-Muslim conflictMitra and Ray (2013)Partition era of the 1940s, and earlierContinuing through the sec...
An Illustration: Hindu-Muslim conflictMitra and Ray (2013)Partition era of the 1940s, and earlierContinuing through the sec...
On the aggressor: Wilkinson (2004), Annual Reports of the Minori-ties Commission (1988 and 1989)1985–1987 526 Hindu-Muslim...
Predictions:Income growth in aggressor group reduces conflict.Lowers incentive to participate in confrontations.But income ...
Casualties, 5-Year Average Starting Just After[Poiss] [Poiss] [NegBin] [NegBin] [OLS] [OLS]H Exp ∗∗∗-7.87 ∗∗∗-6.82 ∗∗-2.79...
A Second Argument for Ethnic SalienceEsteban and Ray (2008, 2010)Organized conflict is people + finance.Within-group dispari...
A SummaryEconomic development fundamentally uneven.Large effects on aspirations.Occupational choice is a slow process.So co...
Development and Conflict - Debraj Ray (NYU)
Development and Conflict - Debraj Ray (NYU)
Development and Conflict - Debraj Ray (NYU)
Development and Conflict - Debraj Ray (NYU)
Development and Conflict - Debraj Ray (NYU)
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

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)

  1. 1. 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).
  2. 2. Uneven GrowthRootsPath-dependenceStructural changeGlobalization
  3. 3. Uneven GrowthRootsPath-dependence (sensitivity to initial conditions)Structural changeGlobalization
  4. 4. Uneven GrowthRootsPath-dependenceStructural change (e.g., agriculture → industry)Globalization
  5. 5. Uneven GrowthRootsPath-dependenceStructural changeGlobalization (comparative advantage, FDI)
  6. 6. Uneven GrowthReactions
  7. 7. Uneven GrowthReactionsThe lives of others are on display:Aspirations and frustrations are socially generated.
  8. 8. 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.
  9. 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.
  10. 10. 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.
  11. 11. 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.
  12. 12. The Salience QuestionUneven growth −→ conflict, but along what lines?Religion, ethnicity, geography, occupation, class?
  13. 13. The Salience QuestionUneven growth −→ conflict, but along what lines?Religion, ethnicity, geography, occupation, class?The Marxian answer:classexample: Maoist violence in rural India
  14. 14. 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.
  15. 15. Directly Contested ResourcesLabor marketsEthnic or racial divisions, immigrant vs nativeAgrarian landRwanda, Darfur, ChattisgarhReal estateGujarat, BengalBusinessKyrgystan, Ivory Coast, Malaysia . . .
  16. 16. 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)
  17. 17. 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.
  18. 18. 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
  19. 19. 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
  20. 20. 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
  21. 21. [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)
  22. 22. 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)
  23. 23. 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)
  24. 24. 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.
  25. 25. 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]
  26. 26. 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.
  27. 27. 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.
  28. 28. 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
  29. 29. 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.”
  30. 30. 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.
  31. 31. 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.
  32. 32. 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)
  33. 33. 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.

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