Globalization and Internal Conflict

The paper outlines and compares two models of how globalization is likely to affect the risk of civil war – a liberal model and structuralist model. Overall, we find considerably more support for the liberal model than for the structuralist, anti-globalist model. Trade does appear to have a capacity for increasing internal peace – not directly, but via trade’s beneficial effects on growth and increased political stability. Overall, we find economic openness to be associated with higher growth. Our results give no support to the idea that globalization reduces growth, not even for poor countries. We found some evidence that trade increases income inequality. However, in contrast the robust link established between income inequality and violent crime, we do not find any relationship between inequality and civil war. In sum, the beneficial effect of trade and foreign investment outweighs whatever violence may be generated by increased inequality. We find that economic openness is associated with greater stability of political systems. This effect is particularly strong for democracies, but also positive for inconsistent regimes and autocracies. Finally, in our analysis of the factors increasing the likelihood of civil wars, we find no direct impact of economic openness. However, countries with a high income per capita and a stable political system have considerably lower risk of civil war than those without. Hence, since we find economic openness to increase average income and political stability, we do find an indirect conflict-reducing effect of globalization. * The paper will appear as a chapter in Gerald Schneider, Katherine Barbieri & Nils Petter Gleditsch, ed., 2002, Globalization and Conflict. Boulder, CO: Rowman & Littlefield.The theoretical part of this chapter borrows heavily from Gissinger and Gleditsch (1999). The empirical analysis is new. An earlier version was presented to the World Bank Conference on The Economics and Politics of Civil War: Launching the Case-Study Project, Soria Moria conference center, Oslo, 11–12 June 2001. We are grateful for comments from the participants of that meeting, and from Indra de Soysa, Gunnar Eskeland, Erik Gartzke, John Randa, and Erich Weede. We also acknowledge the assistance of Naima Mouhleb, Håvard Strand, and Lars Wilhelmsen. The findings and conclusions expressed in the chapter are entirely that of the authors, and do not necessarily represent the views of the World Bank. Introduction Trade, foreign investment, and other forms of economic interdependence have grown throughout the post-World War II period, along with a stronger global political consciousness and increased regional cooperation. After the end of the Cold War, not only have these phenomena accelerated, but the lack of any opposing world system has also given them a near-universal character. In a cultural sense, too, the world is becoming a single arena. English is spreading rapidly as a global means of communication for science, commerce, and the transmission of news. New information technology has drastically reduced the costs of the worldwide dissemination of knowledge and opinion. ‘Globalization’ is employed as an umbrella term for these economic, political, and cultural processes. We use it here as a value-neutral term, in contrast to words like dependency or integration, which for many people carry negative or positive connotations. We use the term globalization mainly in the sense of an increasingly open economy. During the period of emerging globalization, economic growth has generally continued in the industrial and post-industrial countries, while a number of newly industrialized countries have taken off. At the political level, the ‘Third Wave’ has brought democratic government to a greater part of the world than in any previous period. Many serious environmental problems in highly developed countries are being tackled with strategies combining national action and international collaboration. On the other hand the former Soviet Union, parts of Africa, and war-torn nations elsewhere are in decline economically, and the most successful economies in Asia have shown clear signs of economic strain. Domestic economic inequality is increasing in most parts of the world. Politically, many new democracies have a poor human rights record, and their political systems appear to be weakly rooted in civil society. Environmental decline continues in many, perhaps most, third-world countries. Even in the highly developed world new environmental problems such as global warming emerge as serious threats to human welfare. Various authors have linked all of these phenomena, positive as well as negative, to effects of globalization. Indeed, globalization is emerging as a key formula embodying most of the modern world’s ills – or its promises. In this chapter, we concentrate on the implications of globalization for internal armed conflict. This is a topic that has been studied less intensively than the social and economic consequences, even less than the implications of globalization for interstate conflict. But the disagreements regarding the consequences of globalization for internal armed conflict are as sharp as in any other such debates. Economic development will be an important intervening variable in the analysis, but we are also concerned with political development, notably democratization. The debate on globalization has moved way beyond the academic arena, to government and to civil society. As the violent demonstrations in Seattle, Prague, Quebec, Gothenburg, and Genova indicate, anti-globalization forces are galvanized into action on the streets. Movements such as Attac that are HÅVARD HEGRE, NILS PETTER GLEDITSCH, AND RANVEIG GISSINGER 2 devoted to challenging liberalization of the global economy are spreading. Coalitions against globalization are formed by some unlikely partners: They include supporters of populist American politicians, who want to terminate US involvement in multilateral treaties and see an end to the United Nations system, organized labor interested in protecting domestic markets and jobs, third-world supporters with anti-imperialist leanings, anarchists, and environmentalists. While the term globalization is relatively new, the issue of whether or not global structures and agents benefit poor countries, or indeed exploit them, has been at the core of social research on the problems of development for decades. Issues of development and underdevelopment were discussed within the framework of modernization theory and structural theory, discussions mirrored in the current debate. While neoliberal and modernization theorists view closer international economic contact as a strong factor in the modernization of poorer countries, the loose coalition of anti-globalists, whom we will call structuralists, emphasize the harmful effects of economic integration. Structuralists argue that foreign direct investment and trade are forms of capitalist exploitation of developing societies, and that they promote poverty and societal disarray and conflict within the developing world. In contrast, neoliberal models blame internal processes of poor governance and unsuccessful development policies and downplay international processes as the cause of underdevelopment. In this chapter we will make an attempt to test some of these arguments. In order to do so, we have to simplify them, hopefully not to a point where they can no longer be recognized by their proponents. The Liberal Model We first summarize the liberal model in Figure 1: An open economy leads to a higher level of economic development. In turn, this leads to peace, both directly and through the promotion of democracy. In developing this model, we were inspired by the overall perspective of liberal conflict theorists such as Weede (1995) and Russett and Oneal (2001), drawing on Manchester liberalism and on what Russett and Oneal in particular have identified as a Kantian mode of thinking in international affairs. While these scholars have developed their argument mostly in relation to building a secure foundation for international peace, there is also a solid basis for a liberal argument about domestic peace. Since internal conflict is the overwhelmingly dominant form of conflict today (Wallensteen and Sollenberg, 2001), the political importance of this is obvious. Figure 1 A Liberal Model Peace Open Economy A C High level of economic development B