Chapter 2: Growth and Conflict
BACKGROUND Despite many reservations, economic growth constitutes the principal avenue via which sustainable poverty reduction can take place in lowincome developing countries. Redistributing income without making the cake bigger only serves to make the already poor more equal. Thus, growth is a necessary condition for poverty reduction in low-income countries. Growth can reduce poverty if some of the benefits of growth trickle down to the poor, even if its principal beneficiaries are the wealthy.1 Such pro-poor growth can also serve to stem the seeds of conflict (poverty and inequality) by fostering human development. Moreover, there are similarities between conflict prevention and the deep determinants of growth in the long run because of factors common to both: institutions, inequality, endowments and so on. Growth failure, or growth biased against certain groups, can create both greed and grievances, which are prerequisites for the onset of violent internal conflict. Furthermore, in empirical work, the most robust predictor of the danger of conflict breaking out is low per capita income, implying low growth (Ross, 2004b). Thus an important growth–conflict nexus does exist; the purpose of this chapter is to explore that link. This association is, however, complex in that we must first examine the alternative explanations for growth in the long run, then look at the contribution of a rich natural resource endowment to growth and institutional development, before we begin to understand the connection between conflict, growth and institutions, which is then found to be riddled with multidirectional causality. The rest of...
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