Turning Swords to Ploughshares & Little Acorns to Tall Trees: the Conflict-growth Nexus & the Poverty of Nations

The importance of the growth and intra-state conflict nexus cannot be overemphasised. The lack of growth prevents poverty reduction and the achievement of the millennium development goals. Similarly, poverty and low growth help to increase the risk of conflict, as individuals have less to lose from conflict in situations of poverty. Consequently, the security and development agendas cannot be dichotomised; the freedom from fear cannot thrive in the absence of the freedom from want. The causes of growth failure in the long-term have similarities to the causes of civil war, the most obvious being institutional failure. The recent economic history of the world provides ample evidence of diverging average incomes between rich and poor countries. This rising inequality between rich and poor nations adds considerably to global insecurity. As far as the causes of conflict are concerned, both the greed and grievance hypotheses have some validity. But the operation of either or both these motivations for civil war require the breakdown of the institutions of conflict management; something that can be described as the break-down of the social contract. The greed explanation for conflict is mainly applied in cross-country econometric studies. Its validity as a direct causal mechanism behind the risk of civil war onset has recently been brought into serious question. The relationship between conflict onset and natural resource revenues, must work through other mechanisms, such as a weakening social contract and withering state capacity. But the abundance of capturable mineral resources or illicit drugs can help to perpetuate already existing civil wars, and the prevalence of conflict seems greater amongst mineral and coffee/cocoa exporters compared to other agricultural and manufactured goods exporters. The latter two categories of economies also seem to experience higher growth rates. The grievance explanation for contemporary civil war is dominant in detailed conflict case studies. Grievances can be historical, but it will have a measurable counterpart in group inequalities in socio-economic achievement. Here, the neglected dimension of inter-group or horizontal inequality, measured by factors such as human development gaps can have a great deal of explanatory power. The most robust explanatory factor for conflict risk is low per-capita income, implying growth failure. Growth can reduce conflict risk in four ways. First of all, by lowering poverty it provides fewer ready recruits for conflict entrepreneurs. Secondly, growth ultimately lowers inequality, and this can also reduce conflict producing inter-group or horizontal inequality. Thirdly, growth creates denser sets of interaction between economic agents, resulting in situations where there is much more to lose from conflict. Fourthly, growth can improve institutional functioning, creating better chances of peaceful conflict resolution; even producing situations ripe for the emergence of democracy. One of the greatest contemporary problems in connection with conflict and civil war is the instability of most peace agreements. Peace agreements need to be strengthened via commitment technologies, and better peace arrangements involving fair division of the post-war economic and political pie are required. The economic reconstruction following war must be broad based and pro-poor, and also address the horizontal inequalities that helped engender conflict in the first place. * Background paper for the United Nations (Department for Economic and Social Affairs) World Economic Survey, 2006. I thank Kate Khemmarat and Mohammad Zulfan Tadjoeddin for their assistance. The Conflict-Growth Nexus S Mansoob Murshed