Globalization and Social Transition

When the Bolivian government tried to privatize water services on the recommendation of the World Bank in 1999 the citizens of Cochabamba, the country's third largest city, took their opposition to this liberalization project to the streets. These demonstrations intensii ed following a steep rise in water prices which had been the result of the takeover of the local water works by multinational consortium. The occasionally violent clashes of the protestors with the Bolivian state in 1999 and 2000 came to be known as the Cochabamba Water War; they are generally seen as an ideal illustration of the social ills that economic integration can bring about. 1 Two movies – Quantum of Solace, a James Bond installment, and También la lluvia (Even the Rain), a Spanish production linking these events to Latin America's colonial past – and numerous documentaries try to convince their audiences that the opening up of protected markets to international goods and capital undermines the social fabric of the developing world. However, systematic examinations of the globalization–civil conn ict nexus provide a more nuanced picture of the domestic consequences of growing economic interdependence, be it mandated by an international organization or voluntarily introduced by the government in charge. While the growth ee ects of economic integration appease societies in the long term (Hegre et al. 2003; Barbieri and Reuveny 2005; Flaten and de Soysa 2012), the path that needs to be taken to reap the benee ts of globalization increases social tensions and the risk of civil violence (Bussmann, et al. 2005; Bussmann and Schneider 2007; Magee and Massoud 2010). In essence, abrupt liberalization measures amount to negative economic shocks for a certain part of the society at least in the short term. This might motivate those who have lost their jobs or parts of their income, or face a high risk to be bereaved in this way, to haggle with other groups over who has to shoulder the costs of the necessary adaptation of the economy to global competition (Alesina and Drazen 1991). Such confrontations run the risk of turning violent as the losers of economic integration might calculate that the benee ts of restoring the status quos through the use of force outweigh the anticipated utility of accepting the liberalization measures. " Globalization shocks " (Nieman 2011) can in this vein increase the risk of civil war, although a sudden closing of the economy might …