Implications of an Economic Theory of Conflict: Hindu-Muslim Violence in India

Abstract

for useful discussions, and to Steve Wilkinson for granting us access to a dataset on religious conflict. We thank Jay Dev Dubey for his able research assistance. We are grateful to five anonymous referees for their valuable comments. We particularly thank Co-Editor Jesse Shapiro, who went beyond the call of duty in his detailed reading of the manuscript, making many constructive suggestions that greatly improved both the content and the exposition. ABSTRACTWe model inter-group conflict driven by economic changes within groups. We show that if group incomes are low, increasing group incomes raises violence against that group, and lowers violence generated by it. We then apply the model to data on Hindu-Muslim violence in India. Our main result is that an increase in per-capita Muslim expenditures generates a large and significant increase in future religious conflict. An increase in Hindu expenditures has negative or no effect. These findings speak to the origins of Hindu-Muslim violence in post-Independence India. ABSTRACTWe model inter-group conflict driven by economic changes within groups. We show that if group incomes are low, increasing group incomes raises violence against that group, and lowers violence generated by it. We then apply the model to data on Hindu-Muslim violence in India. Our main result is that an increase in per-capita Muslim expenditures generates a large and significant increase in future religious conflict. An increase in Hindu expenditures has negative or no effect. These findings speak to the origins of Hindu-Muslim violence in post-Independence India. hini Pande for useful discussions, and to Steve Wilkinson for granting us access to a dataset on religious conflict. We thank Jay Dev Dubey for his able research assistance. We are grateful to five anonymous referees for their valuable comments. We particularly thank Co-Editor Jesse Shapiro, who went beyond the call of duty in his detailed reading of the manuscript, making many constructive suggestions that greatly improved both the content and the exposition. Observations 126 132 126 132 126 132

War and conflict in economics: Theories, applications, and recent trends

“…Similarly, analyses of conflict have been expanded to consider interactions between different kinds of contestants, for instance conflicts between state and non-state actors (de Mesquita, 2013;Powell, 2013;Fearon, 2011;Esteban et al, 2015) or between ethnic groups (Esteban and Ray, 2011;Esteban et al, 2012;Mitra and Ray, 2014), and a number of papers consider the influence of third-parties on conflict frequency and outcomes (Baliga and Sjöström, 2012;Hörner et al, 2015;Dekel and Wolinsky, 2012). We describe these papers in somewhat more detail below.…”

“…Esteban et al (2012) confirm the expected effects empirically, leading to a more nuanced understanding of conflict as a mixture of "greed" over private prizes and "grievance" over the allocation of public goods among groups. Mitra and Ray (2014) study Hindu-Muslim conflict in India and find evidence that conflict is increasing in Muslim wealth, though they do not claim to know which side is instigating in response.…”

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“…7 Thus, the monetary value of the few positions in the bureaucracy which were available could motivate "individuals … to fight in order to control the state and hence the sources of rent it gives access to". 8 The fact that the south remained structurally poor and dependent on remittance from the "productive" parts of the country seems to support instances of corruption in the system. If, for instance, a region privileged over others in terms of infrastructure was not been able to build a sustainable local economic base, it could be said that this infrastructural investment must have been mostly inappropriately, unsustainably or not actually carried out.…”

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