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Redistribution, Inequality and Political Conflict

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  • Patricia Justino

    ()
    (Poverty Research Unit at Sussex, Department of Economics, University of Sussex)

Abstract

This paper analyses the relationship between redistributive policies and civil unrest. This relationship is modelled in a discrete two-period recursive model. Key theoretical assumptions and outcomes are tested empirically using data for a panel of 14 major Indian states between 1973 and 2000. The analysis shows that, in the medium-term, redistributive policies have been significantly more effective in reducing civil unrest in India than more direct solutions, such as the use of police and military forces, and have resulted in important positive externalities on economic growth. This represents an important lesson for countries where social cohesion tends to break frequently but large-scale wars may be avoidable.

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File URL: http://www.sussex.ac.uk/Units/PRU/wps/wp18.pdf
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Bibliographic Info

Paper provided by Poverty Research Unit at Sussex, University of Sussex in its series PRUS Working Papers with number 18.

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Length: 50 pages
Date of creation: 2003
Date of revision:
Handle: RePEc:pru:wpaper:18

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Postal: School of Social Sciences and Cultural Studies, Falmer, Brighton BN1 9SN
Phone: (01273) 678739
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Web page: http://www.sussex.ac.uk/Units/PRU/
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Keywords: Redistribution; conflict; inequality; economic growth; India; panel data;

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References

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  1. Roger R. Betancourt & Suzanne Gleason, 1999. "The Allocation of Publicly-Provided Goods to Rural Households in India: On Some Consequences of Caste, Religion and Democracy," Electronic Working Papers 99-004, University of Maryland, Department of Economics.
  2. Alberto Alesina & Roberto Perotti, 1993. "Income Distribution, Political Instability, and Investment," NBER Working Papers 4486, National Bureau of Economic Research, Inc.
  3. Christopher Cramer, 2003. "Does inequality cause conflict?," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(4), pages 397-412.
  4. Torsten Persson & Guido Tabellini, 1991. "Is Inequality Harmful for Growth? Theory and Evidence," NBER Working Papers 3599, National Bureau of Economic Research, Inc.
  5. Barro, Robert J, 2000. " Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
  6. Olson, Mancur, 1963. "Rapid Growth as a Destabilizing Force," The Journal of Economic History, Cambridge University Press, vol. 23(04), pages 529-552, December.
  7. Roland Benabou, 1997. "Inequality and Growth," NBER Working Papers 5658, National Bureau of Economic Research, Inc.
  8. Bruno, Michael & Ravallion, Martin & Squire, Lyn, 1996. "Equity and growth in developing countries : old and new perspectives on the policy issues," Policy Research Working Paper Series 1563, The World Bank.
  9. Ehrlich, Isaac, 1973. "Participation in Illegitimate Activities: A Theoretical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 521-65, May-June.
  10. repec:fth:coluec:636 is not listed on IDEAS
  11. Gintis, Herbert & Bowles, Samuel, 1982. "The Welfare State and Long-Term Economic Growth: Marxian, Neoclassical, and Keynesian Approaches," American Economic Review, American Economic Association, vol. 72(2), pages 341-45, May.
  12. Keefer, Philip & Knack, Stephen, 2000. "Polarization, politics, and property rights : links between inequality and growth," Policy Research Working Paper Series 2418, The World Bank.
  13. Xavier Sala-i-Martin, 1996. "Transfers, Social Safety Nets, and Economic Growth," IMF Working Papers 96/40, International Monetary Fund.
  14. Foley, Duncan K., 1978. "State expenditure from a Marxist perspective," Journal of Public Economics, Elsevier, vol. 9(2), pages 221-238, April.
  15. Zeckhauser, Richard J, 1971. "Optimal Mechanisms for Income Transfer," American Economic Review, American Economic Association, vol. 61(3), pages 324-34, June.
  16. Alesina, Alberto F & Rodrik, Dani, 1991. "Distributive Politics and Economic Growth," CEPR Discussion Papers 565, C.E.P.R. Discussion Papers.
  17. Perotti, Roberto & Alesina, Alberto, 1996. "Income Distribution, Political Instability, and Investment," Scholarly Articles 4553018, Harvard University Department of Economics.
  18. Hirschman,Albert O., 1981. "Essays in Trespassing," Cambridge Books, Cambridge University Press, number 9780521282437, October.
  19. Perotti, Roberto, 1993. "Political Equilibrium, Income Distribution, and Growth," Review of Economic Studies, Wiley Blackwell, vol. 60(4), pages 755-76, October.
  20. Patricia Justino & Julie Litchfield, 2003. "Poverty Dynamics in Rural Vietnam: Winners and Losers During Reform," PRUS Working Papers 10, Poverty Research Unit at Sussex, University of Sussex.
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Citations

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Cited by:
  1. Patricia Justino, 2009. "The Impact of Armed Civil Conflict on Household Welfare and Policy Responses," HiCN Working Papers 61, Households in Conflict Network.
  2. Vadlamannati, Krishna Chaitanya, 2008. "Socioeconomic, Institutional & Political Determinants Of Human Rights Abuses: A Subnational Study Of India, 1993 – 2002," MPRA Paper 10142, University Library of Munich, Germany.
  3. Rohner, Dominic, 2011. "Reputation, group structure and social tensions," Journal of Development Economics, Elsevier, vol. 96(2), pages 188-199, November.
  4. Patricia Justino, 2006. "On the Links between Violent Conflict and Chronic Poverty: How Much Do We Really Know?," HiCN Working Papers 18, Households in Conflict Network.
  5. Rohner, D., 2007. "From Rags to Rifles: The Economics of Deprivation, Conflict and Welfare State," Cambridge Working Papers in Economics 0771, Faculty of Economics, University of Cambridge.
  6. Dominic Rohner, 2010. "From rags to rifles: deprivation, conflict and the welfare state," IEW - Working Papers 463, Institute for Empirical Research in Economics - University of Zurich.

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