Over the second half of the 20th century, civil conflicts (i.e. intra-state conflict) have become increasingly dominant and now account for a greater share of deaths and hardship than any other form of conflict (the main comparator being inter-state conflict). Empirical research shows that economic variables, particularly poverty and income inequality, are important determinants of civil conflict and there are a variety of channels through which they take effect. For example, in poor countries young men choose to join the conflict because their expected income from fighting is greater than the income that they would obtain from the labor market, especially if natural resources are under dispute. On the other hand, low national income leads to weaker repressive capabilities of the state, making it unable to control insurgencies.
Although the earlier empirical evidence often highlights the association between economic conditions and civil conflict, there is limited understanding of how armed groups form and cohere. A promising starting point is the analysis of ethnic ties and divisions, which are popularly viewed as the leading sources of group cohesion and inter-group civil conflict. The two broad approaches on ethnic divisions are “primordialist” and “instrumental”. The primordialist view takes the position that ethnic differences are deeply cultural, biological or psychological, and irreconcilable. The instrumental view treats ethnicity as a strategic basis for coalitions that seek a larger share of economic or political power. Under either of these approaches, ethnicity can facilitate communication and cooperation within the group but at the same time it increases tensions between groups through asymmetric information and commitment problems. But why ethnic groups themselves form and cohere in order to engage in violence is still an open question.
Esteban, Joan, Laura Mayora, and Debraj Ray (2012) “Ethnicity and Conflict: Theory and Facts”, Science 336: 858-865.
Horowitz, Donald L. (2001) Ethnic Groups in Conflict, University of California Press.
Miguel, Edward, Shanker Satyanath, and Ernest Sergenti (2004) “Economic Shocks and Civil Conflict: An Instrumental Variables Approach”, Journal of Political Economy, 112(4):725-753. [Working paper version]