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Inequality, conflict and development Frances Stewart ‘Remove the secondary causes that have produced the great convulsions of the world and you will almost always find the principle of inequality at the bottom. Either the poor have attempted to plunder the rich, or the rich to enslave the poor. If, then, a society can ever be founded in which everyman shall have something to keep and little to take from others, much will have been done for peace’ (de Tocqueville 1835, quote from 1954 edition,: 266) Structure of talk What sort of conflict? Some consequences of conflict Causes of conflict Focus on Horizontal Inequalities Policy implications Debate on inequality and conflict What type of conflict? Non-violent conflict; Violent conflict: Domestic Criminality Group violence: Government/power Communal Here concerned with group violence, both government and communal. Violent conflict important in poor countries Prevalence high (though declining in last ten years). Proportion of ‘ethnic’ conflict rising Has highly damaging impact on economy and welfare Undermines states/governance. Weak states thought to be source or facilitator of global terrorism. Trends in ethnic conflict, 1945-2004 War and Human Development Direct impact Much indirect via economic effects Methodological issues Case studies (seven); and international data on 25 worst affected countries, 1970-1995. Weak data The counterfactual - before and after - with and without - regional comparisons Case studies Afghanistan Mozambique Nicaragua Sierra Leone Sri Lanka Sudan Uganda Findings:macro GDP almost always negative impact – supported by econometric work. Investment (public and private) negative, but foreign savings rose so fell by less than domestic savings. Consumption per head fell with per capita GDP, though generally not proportionately, as savings ratio fell. Exports in US dollars fell in two-thirds of the countries; But six countries achieved a rise. Both Angola (exporting minerals) and Iran

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