How do poverty and inequality causally interact with conflict? While there is a general view that poverty and inequality can lead to conflict, the nature of the links are less well appreciated. This paper draws out the links based on the recent economics literature and discusses their implications for policy. While inequality is a natural concomitant of economic processes, particularly those driven by the market, its implications for security emerge when unequal outcomes align with socio-political cleavages.
The causality from poverty and inequality to conflict is ambiguous. Whilst violent conflict is a feature of poorer rather than richer societies, wealth can provide the means to conflict as much as take away the reason for it – the balance of forces is delicate and country specific. A careful assessment of the intersection between economic outcomes and social divisions is necessary in designing policies and interventions for growth and poverty reduction.
Two factors are important to explain why low levels of tension escalate into group violence: a background of inequality and sharp increases in inequality in directions that play into other socio-economic factors.
- The global trend on poverty is at too high a level of aggregation to explain the incidence of conflict.
- Increase in inequality within countries means richer individuals and richer groups are getting richer faster than the poor – raising the prospect of group tensions.
- If conflict can be related to perceived and actual differences between groups then it is the between-group component of inequality that is key.
- Polarisation of society into groups with distinct identities can be a cause of conflict on its own but this is exacerbated if in addition there are average income differences between the groups.
- A decline in national poverty can be accompanied by growing group tensions as some groups do better than others in poverty reduction.
- If processes of economic growth create group inequality this can engender conflict sufficient to negatively affect the growth process itself.
There is not a one size fits all blueprint for action because of the historical and social differences between countries that can underlay the potential for conflicts to develop.
Intermediate policy aims should attempt to:
- Systematically reduce inter-group inequality between salient groups so that the initial conditions are not favourable to conflict.
- Build a thick set of associational links between groups, so that the inevitable sparks that arise in the course of social and economic life do not ignite into conflict.
- Design economic policy packages that do not sharply increase inequality across salient groups.
UN and international agencies should advocate policies that:
- Address structural cleavages by attacking discrimination and supporting positive discrimination.
- Support cross-communal associational life financially and politically.
- Balance conventional economic efficiency with the need to maintain a balance in cross-group income differences.
