Entertaining Douglass North: Political Violence and Social Order

Violence creates chaos or uncertainty, destabilises social and political structure, deters investment, and retards economic prosperity. In order to curtail violence, the society needs a social order which comprises a set of formal and informal institutions. The social order is aimed at structuring economic, social and political interactions. In this study, we examine what such a set of institutions implies for the mitigation of violence. We take four indicators of political violence, i.e. civil wars, inter-state wars, ethnic violence, and terrorism. In addition, we aggregate civil wars, inter-state wars and ethnic violence in order to get major episodes of the political violence. We find that for ethnic violence, terrorism, and major episodes of political violence, informal institutions are more efficient in decreasing violence. Also, they enhance the efficacy of formal institutions in mitigating these types of violence. In case of civil wars and interstate wars, formal institutions are more effective; however, if the level of formalisation is not accompanied by commiserate informal support, then the formal institutions become ineffectual. Moreover, the results show that there is complementarity between formal and informal institutions in reducing violence; giving credence to the idea that without institutional reforms, violence cannot be prevented in modern societies.