Economic Inequality and Ethnic Conflict: A Cross-National, Group-Level Analysis
41 Pages Posted: 13 Jul 2012 Last revised: 23 Aug 2012
Date Written: 2012
Does economic inequality affect the likelihood of ethnic conflict? Most empirical studies of civil war onset do not find a significant relationship between economic inequality and the likelihood of ethnic civil wars. In this paper, I present and test a theory that explicitly links economic inequality to group incentives for violence and is consistent with the fact that cross-national measures of economic inequality exhibit no effect on armed conflict. The theory is based on the premise that the incentives of an ethnic minority for using violence depend on the costs of being defeated by the rival ethnic group with opposite policy preferences on both the political and the economic dimensions of an inter-group conflict. The costs of defeat depend on whether the ethnic minority is wealthier or poorer than the national average, and on the initial tax rate in the country. Thus, for wealthy minorities with income above the national average, the incentives to use violence should be low when the tax rate is low than when it is high, and these incentives should decrease in income since defeat is likely to result in a higher tax rate. For poor minorities with income below the national average, the incentives to fight should be low when the tax rate is high than when it is low, and these incentives should increase in income since defeat is likely to result in a lower tax rate. I test these hypotheses using the available income data constructed by Baldwin and Huber (2010) for politically relevant ethnic groups, and ethnic conflict data sets of Wimmer et al. (2009) for post-World War II period. While the evidence strongly supports the hypothesis regarding poor minorities, the results are mixed with respect to wealthy minorities.
Keywords: inequality, ethnic conflict, redistribution
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