Growth and conflict in the developing world: Neo-liberal narratives and social-economy alternatives

Abstract

The last quarter of the 20th century saw an increase in violent conflicts across the globe. With connections between growth, poverty and conflict increasingly difficult to ignore, research has begun examining economic dimensions of conflict. This paper reviews and critiques this new research, much of it conducted by the World Bank. The research argues that war results from poverty, and poverty from misguided economic policies, so that reducing conflict requires redoubling efforts to promote growth via neo-liberal reforms. I criticize the conceptual underpinnings of this argument, including its overemphasis on individual incentives and its claim that social and economic injustices do not contribute to violent conflicts. Instead I argue that social economics provides valuable alternative perspectives on conflict that take seriously its social dimensions, especially problems of economic justice and the common good.

Keywords:

• growth
• violent conflict
• social economics

Notes

1 Papers resulting from this research include Azam et al. (2001); Azam and Hoeffler (2002); Collier and Hoeffler (2002a, 2004a, 2004b); and Collier et al. (2004).

2 This economic take on violent conflict illustrates the “economics imperialism” of which Ben Fine (1999) has written, in which analytical approaches of mainstream economics are extended to subjects and areas traditionally considered to be outside the economic realm.

3 Later work in this project acknowledges that, at the outset of conflict, personal enrichment is likely secondary to political motives; but these priorities are said to reverse later because, as a result of undertaking “criminal activities … as a grim necessity to raise finance, … rebel leaderships tend to do well out of war and may be quite reluctant to see it end” (Collier et al. 2003: 79).

4 See, for example, World Bank (2002).

5 For example, the regressions include measures of “vertical” inequality, though in many cases it is “horizontal” inequality (i.e. across groups) that would be expected to affect conflict risks (Cramer 2001). See also Fearon and Laitin (2003) for discussion of conceptual and measurement problems related to ethnicity and ethno-linguistic fractionalization.

6 As Hobson wrote in distinguishing John Ruskin's vision of social economics from political economy: “… we do not abandon the self-seeking motives … [but] we enlarge the scope and expand the nature … [of] the ‘self’ which is seeking satisfaction … by imposing sacrifices of the narrower self in favour of a wider self which grows as we identify our good with that of others” [quoted in Lutz 1990: 240]. See also Bowles and Gintis (1998/1999).

7 There is also variation among individuals from a given culture. Fehr and Gächter (2000: 162) estimate that 20 to 30% of subjects in public-goods experiments behave as selfish free-riders.

8 Attitudes and practices in support of cooperation include internal restraint, mutual monitoring, concern with reputation, and punishment of violations (Bowles and Gintis 1998/1999; Fehr and Gächter 2000; Camerer 2001).

9 As van den Berghe (1999: 23) puts it, such differences almost always reflect an “interplay of the objective reality of biological descent and the subjective perception, definition, and manipulation of that objective reality.” For discussion of the role of group identities in conflict see, e.g., Horowitz (1985), Reynal-Querol (2002), Fearon and Laitin (2003), Axelrod and Hammond (2003). On issues of identity generally, see also Davis (2003).

11 See also Lutz (1990: 253) on Maslow's view that material insecurity keeps people from realizing their social natures.

12 See also Deutsch (2000).

10 Adverse consequences of unmet needs are also discussed by Maslow (1954), who noted that unmet basic needs can cause psychopathologies, and by Galtung (1990: 305), who thought social disintegration would occur eventually if a society persistently failed to meet people's basic needs.

13 See also the studies in Henrich et al. (2004) for discussion of whether justice-related principles vary across cultures, versus contextual interpretations of what constitutes adherence to principles. Kuran (1989) discusses concepts of justice in Islamic economic thought. Miller (1992) summarizes empirical evidence on popular views of distributive justice.

14 See Starr (2004). As a Central Bank official remarked six years after the bills were introduced, “If you went out today and asked citizens about the type of the banknotes they had in their pockets, … they wouldn't be able to tell you the specific design of those banknotes, but … they would know how much money exactly they have” (Central Bank of Bosnia and Herzegovina 2004).

15 See Bowles et al. (2003).

16 Haugerudbraaten (1998) provides a valuable overview of the theory and practice of peace-building.