Empirical Applications of Multidimensional Inequality Analysis

This paper explores the empirical application of theoretical multidimensional inequality analysis using real household welfare distributions. The paper operationalises recent conceptual developments in multidimensional inequality theory and assesses their usefulness for measurement and policy analysis. Despite the existence of a thriving theoretical literature on multidimensional inequality, empirical applications, particularly at the individual and household levels, are few and far between. This paper compares and contrasts different methodologies for the analysis of multidimensional welfare, including multidimensional inequality indices and stochastic dominance techniques. The results strongly highlight the importance of bringing non-monetary aspects of household welfare into the forefront of inequality analysis since measurements based solely on the distribution of income variables may misrepresent the degree of overall inequality in society. Agreement over the various approaches to the measurement of multidimensional inequality entails, however, non-trivial decisions that may limit the practical usefulness of these measures. We suggest that the use of multidimensional inequality ranges and restrictive dominance criteria may open significant scope for further developments in the empirical analysis of multidimensional inequality.Multidimensional inequality; inequality indices; income inequality; education inequality; health inequality; stochastic dominance

Two Faces of Participation: The Story of Kerala

This paper analysis the impact of collective action and political participation on the economic development of the south Indian state of Kerala over the last three decades. Despite its low economic basis, Kerala’s successive governments have implemented a large redistributive programme that resulted in impressive levels of social development. Kerala’s success has been largely attributed to the actions of organised collective movements, both in the formal and informal sectors, in the form of militant peasants associations and labour unions. Collective actions have, however, also contributed towards political instability, increase in the risk of investment and uncertainty in labour productivity. This paper examines the effects of collective actions on Kerala’s economic growth during the last three decades using time-series analysis techniques, considering in turn collective action and redistributive policies to be external and then endogenous variables to the process of economic growth in Kerala. The results show that while some forms of collective action can contribute towards the decrease of poverty and increase in state income, other forms harm economic growth. We compare these results with those obtained for a panel of 14 major Indian states.Redistribution, industrial disputes, collective action, participation, social development, economic growth, Kerala, India

How Can We Prevent Violence Becoming a Viable Political Strategy?

A basic issue that conflict analysis investigates is how non-peaceful ways of living and governing become viable political strategies. Macro-level studies provide some important insights but micro-level analysis is vital to understand the mechanisms that make violence possible. This briefing outlines some preliminary findings in this respect from MICROCON, a major research programme analysing violent conflict at the micro level. It also discusses their implications for policies aimed at preventing the (re-)eruption of violent confl icts. An important overall insight is the variety and combination of motives involved in each case. Given this complexity, policy strategies need to be based on a micro-level appreciation of people's strategies for coping with vulnerabilities to both poverty and violence.Violent Conflict; peace building

Poverty and Violent Conflict: A Micro Level Perspective on the Causes and Duration of Warfare

This paper argues that endogenous mechanisms linking processes of violent conflict and household poverty provide valuable micro foundations to the ongoing debate on the causes and duration of armed conflicts. Household poverty affects the onset, sustainability and duration of violent conflict due to the direct and indirect effects of violence on the economic behaviour and decisions of households in conflict areas. These effects lead to the emergence of symbiotic relationships between armed groups and households living in areas they control that may sustain the conflict for a long time. The strength of this relationship is a function of two interdependent variables, namely household vulnerability to poverty and household vulnerability to violence.Household poverty, household welfare, causes of armed conflict, duration of conflict, micro-foundations of conflict

War and Poverty

The main objective of this paper is to systematically identify potential channels of transmission linking civil war and poverty that may lead to the persistence of cycles of poverty and war. A particular focus of the paper is the notion of individual (and group) agency during civil wars, as well as agency constraints faced by populations affected by violence. Although the outbreak and impact of war is known to depend on several financial and political factors, the onset, duration and magnitude of the impact of civil wars are also closely related to what happens to people during violent conflicts and to what people do in areas of violence to secure livelihoods, economic survival, physical security and their social networks. The nature and extent of these choices depends in turn on how individuals and households relate to changes in social norms and forms of institutional organisation during civil wars. The paper explores the economic channels through which war may simultaneously affect and be affected by the economic status and responses of individuals and their immediate relations in areas of violent conflict to cope with and adapt to changes to livelihoods and economic status during civil wars. This analysis focuses in particular on the important but under-researched role of social and political institutional transformation during civil war on individual and household poverty.

On the Links between Violent Conflict and Household Poverty: How Much Do We Really Know?

This paper assesses the usefulness of a new emerging body of work on the micro-level analysis of conflict and violence in advancing our current understanding of the relationship between violent conflict and household poverty. Micro-level empirical evidence on the relationship between violent conflict and poverty has been scarce and at times contradictory. This field of research has, however, grown significantly in recent years and evidence is slowly starting to accumulate. The paper makes use of new findings to propose a framework to understand fundamental transmission mechanisms from violent conflict through to household poverty, as well as the potential impact of household poverty on conflict. This framework suggests three key self-reinforcing mechanisms through which violent conflict may impact on the poor: through the impact on assets and livelihoods, through education and health effects, and through the displacement of populations and the breakdown of socioeconomic networks. In addition, the paper conceptualises the extent to which poverty can act as a trigger for violent conflict owing to lack of choice of those involved, widespread social discontent amongst different population groups and the search for better socio-economic opportunities. We expect this framework to act as a benchmark for further work on the analysis of the relationship between poverty and violent conflict, including much-needed efforts at gathering further empirical evidence.Household poverty, violent conflict, micro analysis

Social Security in Developing Countries: Myth or Necessity? Evidence from India

This paper discusses the importance of social security policies in developing economies, using empirical evidence from India. The paper discusses the viability of implementing systems of social protection in developing countries and provides an empirical analysis of the effects of socio-economic security policies on Indian’s economic performance between 1973 and 1999, using a two-stage least square model adapted to data from a panel of 14 Indian states. The results show that policies that strengthen the social and economic security of the Indian population have been an important endogenous variable to both the reduction of poverty and the economic growth in India.Social security, social protection, economic growth, India, simultaneous equation models, panel data

Carrot or stick? Redistributive transfers versus policing in contexts of civil unrest

Recurrent episodes of civil unrest significantly reduce the potential for economic growth and poverty reduction. Yet the economics literature offers little understanding of what triggers civil unrest in society and how to prevent it. This paper provides a theoretical analysis in a dynamic setting of the merits of redistributive transfers in preventing the onset of (and reducing) civil unrest and compare it with policies of more direct intervention such as the use of police. We present empirical evidence for a panel of Indian states, where conflict, transfers and policing are treated as endogenous variables. Our empirical results show, in the mediumterm, redistributive transfers are both a more successful and cost-effective means to reduce civil unrest. Policing is at best a short-term strategy. In the longer term, it may trigger further social discontent.Transfers, policing, conflict, unrest, India, panel data

Tackling Civil Unrest: Policing or Redistribution?

There is much evidence to suggest that economic and social factors are major causes of civil unrest. However, governments often resort to the use of police and military to tackle such upheavals, rather than using policies that directly address the causes of discontent. This briefing uses data from India to compare the effectiveness of redistributive transfers and policing in reducing conflict. It finds that transfers have a significant effect on the prevention and reduction of civil unrest, particularly in the medium term. While policing reduces conflict in the short term, the continued use of police has either inconsequential effects, or even leads to increases in rioting. These findings have important lessons for other countries where social cohesion breaks frequently, but large-scale conflict may be avoidable.Transfers, policing, conflict, unrest, India