Why are groups important for individual welfare and social stability? When and how do horizontal inequalities lead to conflict? Current thinking about development places individuals firmly at the centre of concern for analysis and policy. Attention is focussed on inequality between individuals. This paper by the Director of the Centre for Research on Inequality, Human Security, and Ethnicity (CRISE), UK, explores why groups are important for individual welfare and social stability, and argues that inequalities between culturally formed groups (horizontal inequalities) are an important but neglected dimension of development.
Groups are socially constructed and malleable, often with fluid membership. Yet their relative performance in economic, social and political dimensions is an important source of individual welfare and can cause serious political instability. This is illustrated by nine case studies (Brazil, Fiji, Malaysia, Mexico, Northern Ireland, South Africa, Sri Lanka, Uganda, USA), in which horizontal inequalities have led to a range of political disturbances.
Key findings are:
- Horizontal inequalities are inequalities between culturally defined groups. They occur where there is a coincidence of cultural identities with inequalities in political, economic or social dimensions. Where ethnic identities are linked to economic/social differences, they catalyse and magnify conflict.
- Where political and economic deprivation coincides, instability may take the form of riots, rebellion, and protests. The strength of these actions, and the degree to which demands are accommodated, depends on the relative size of the group and the strength of the regime.
- In some cases, instability is instigated by the politically powerful attacking the economically privileged; sometimes the politically powerful attack the economically weak in a pre-emptive manner.
- Affirmative action was adopted in the majority of the cases examined. In general, it succeeded in reducing but not eliminating horizontal inequalities, and had no apparent ill-effects on the economy.
- Horizontal inequalities are fairly easy to measure, although data is poor. Where there are only a few large groups, simple ratios can capture the situation However, it is not always easy to select salient groups and define group boundaries. But where measurement is more problematic, horizontal inequalities are likely to be less influential.
Horizontal inequalities are an important dimension of well-being, and can have damaging consequences for development. They ought to be an important policy consideration. At present, they are not on the development agenda, unless forced on to it by events (for example in Rwanda), or they are incorporated in a random manner. Policies to reduce horizontal inequalities are not incorporated in IMF or World Bank adjustment packages. Specific policy pointers are:
- Information needs to be collected by cultural categories.
- Policies must be politically inclusive. A political monopolisation of power is highly provocative and can cause other horizontal inequalities. This can be difficult to achieve, and is not an automatic result of democracy.
- Affirmative action works. Policies include: public investment, distribution requirements imposed on private sector, new legislation, and housing schemes.
- Adopting policies that address horizontal inequalities is not a substitution for poverty reduction. Both are needed.
