Chapter 3: Greed and Grievance
INTRODUCTION Chapter 2 explored the conflict and growth nexus. The failure of economic growth in the long-run is intimately linked to malfunctioning institutions that create problems of their own, including a repressive polity and rampant rent seeking, which may be encouraged by the presence of certain types of resource rents. The foundations for violent conflict are laid in a low-income developing country economy where the failure of growth and economic diversification is characterized by endemic poverty, high asset and income inequality and the failure of the mechanisms for peaceful dispute resolution.1 It is worth reminding ourselves that according to the rational choice paradigm, conflict is a result of choice. This may be myopic, as negotiated settlements which avoid the losses that ensue from war, are usually Pareto superior. Another way of stating this is that conflict is a special form of non-cooperative behaviour; other forms of less destructive non-cooperative behaviour, and cooperation, are superior to violent and therefore more costly non-cooperative interaction. But circumstances (constraints, poverty, institutional failure), mistrust (coordination failure), impatience and myopia (discounting the future) may rule out cooperation or more peaceful forms of non-cooperative negotiation, making conflict the optimal choice for group leaders who have to take into account at least some of the interests of their followers. In recent years, two phenomena have been utilized to explain conflict onset among rational choice theorists: greed and grievance. The former is due to the influential work of Paul Collier (see Collier and Hoeffler, 2002, 2004b). According to this...
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