GSDRC

Governance, social development, conflict and humanitarian knowledge services

  • Research
    • Governance
      • Democracy & elections
      • Public sector management
      • Security & justice
      • Service delivery
      • State-society relations
      • Supporting economic development
    • Social Development
      • Gender
      • Inequalities & exclusion
      • Poverty & wellbeing
      • Social protection
    • Conflict
      • Conflict analysis
      • Conflict prevention
      • Conflict response
      • Conflict sensitivity
      • Impacts of conflict
      • Peacebuilding
    • Humanitarian Issues
      • Humanitarian financing
      • Humanitarian response
      • Recovery & reconstruction
      • Refugees/IDPs
      • Risk & resilience
    • Development Pressures
      • Climate change
      • Food security
      • Fragility
      • Migration & diaspora
      • Population growth
      • Urbanisation
    • Approaches
      • Complexity & systems thinking
      • Institutions & social norms
      • Theories of change
      • Results-based approaches
      • Rights-based approaches
      • Thinking & working politically
    • Aid Instruments
      • Budget support & SWAps
      • Capacity building
      • Civil society partnerships
      • Multilateral aid
      • Private sector partnerships
      • Technical assistance
    • Monitoring and evaluation
      • Indicators
      • Learning
      • M&E approaches
  • Services
    • Research Helpdesk
    • Professional development
  • News & commentary
  • Publication types
    • Helpdesk reports
    • Topic guides
    • Conflict analyses
    • Literature reviews
    • Professional development packs
    • Working Papers
    • Webinars
    • Covid-19 evidence summaries
  • About us
    • Staff profiles
    • International partnerships
    • Privacy policy
    • Terms and conditions
    • Contact Us
Home»Document Library»Can institutions resolve ethnic conflict?

Can institutions resolve ethnic conflict?

Library
W Easterly
2000

Summary

Ethnic conflict is a tragic constant of human history. How does it affect a nation’s economy? Can it be resolved by institutions? This study by the World Bank examines the connection between ethnic conflict and economic development and argues that the quality of institutions is a key fact in the equation.

From the Balkans to Central Africa to Indonesia to Nigeria, ethnic conflict is still very much in the news today. Ethnic conflict has a peaceful political dimension as well as the more publicised violent dimension. Recent economics literature has studied the effects of ethnic conflict on economic development. High quality institutions, such as rule of law, bureaucratic quality, freedom from government expropriation, and freedom from government repudiation of contracts, mitigate the adverse economic consequences of ethnic fractionalisation. In countries with sufficiently good institutions, ethnic diversity does not lower growth or worsen economic policies. High quality institutions also lessen war casualties on national territory and lessen the probability of genocide for a given amount of ethnic fractionalisation. However, these forms of violence are not the channel through which ethnic fragmentation and its interaction with institutions affect economic growth.

There are strong institutional effects of corruption and lack of rule of law on economic growth. Furthermore, there are direct and indirect effects of ethnic diversity on economic growth. Institutional factors interact with ethnic diversity to the extent that they determine whether ethnic conflict is destructive or is contained by the rules of the game.

  • Ethnic diversity has a more adverse effect on economic policy and growth when institutions are poor.
  • Poor institutions have an even more adverse effect on growth and policy when ethnic diversity is high.
  • In countries with sufficiently good institutions, ethnic diversity does not lower growth or worsen economic policies.
  • Good institutions also lower the risk of wars and genocides that might otherwise result from ethnic fractionalisation.

Ethnically diverse nations that wish to endure in peace and prosperity must build good institutions. This is a promising area for future research. It may be that the ‘institutions’ variable is a proxy for more general legal safeguards for ethnic minorities.

  • Economists should do more case studies of successful and unsuccessful examples of ethnic groups co-existing within nations.
  • The study of oppression of one ethnic group by another is a rich area for further investigation.
  • What conditions facilitate or prevent oppression? How much does the answer depend on initial inequality between ethnic groups? How much does the answer depend on the definition of ethnicity?
  • The study of ethnically-based war and genocide is also a fruitful area for further research.
  • What can we learn from the abundant historical data about the possible economic or social determinants of ethnic war and genocide? What more can governments do to finally bring the sad history of ethnic conflicts to an end?

Source

Easterly, W., 2000, Can Institutions Resolve Ethnic Conflict? The World Bank Institute, Washington D.C.

Related Content

Affirmative action around the world Insights from a new dataset (update)
Working Papers
2023
Social development and human development
Topic Guide
2015
Social exclusion
Topic Guide
2015
Contemporary conflict analysis of Iraq
Conflict Analysis
2014

University of Birmingham

Connect with us: Bluesky Linkedin X.com

Outputs supported by DFID are © DFID Crown Copyright 2025; outputs supported by the Australian Government are © Australian Government 2025; and outputs supported by the European Commission are © European Union 2025

We use cookies to remember settings and choices, and to count visitor numbers and usage trends. These cookies do not identify you personally. By using this site you indicate agreement with the use of cookies. For details, click "read more" and see "use of cookies".