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Session I: Why are horizontal inequalities important? Major findings

Session Leader/Presenter: Professor Frances Stewart (CRISE Director)

Discussants: Professor Tony Atkinson (University of Oxford) & Joelle Jenny (DFID)

Notes: Arnim Langer (CRISE)

Session Presentation

The first presentation of the conference was given by Professor Frances Stewart (FS), CRISE Director. She started by introducing CRISE and explained that the Centre’s overall aim was to study why some multiethnic societies are able to maintain political stability, while others experience violent conflicts. FS also noted that a particular focus in this respect was on how horizontal inequalities (HI) affect political instability. FS further mentioned that CRISE conducts in-depth comparative country studies, in partnership with local scholars, in three regions of the world. In West Africa, CRISE focused on Ghana, Nigeria and Côte d’Ivoire, in Latin America – Peru, Bolivia and Guatemala and in Southeast Asia – Malaysia and Indonesia. FS then moved on to the conference at hand and explained that the main objective of the Oxford Policy Conference was to present and discuss the major findings and policy recommendations that had come out of the CRISE research of the preceding four years. She also mentioned that policy meetings with decision-makers, academics, NGOs, etc. had already taken place at the regional level.

Subsequently, FS discussed in detail what HIs are and why they matter. She started by explaining that HIs are inequalities between groups, and that this differs from the ‘normal’ definition of inequality which usually focuses on inequality among individuals. While noting that the relevant groups may vary from country to country, she emphasized that the most politically salient and relevant groups can be based on ethnicity, religion, region, race or some other ‘cultural’ marker. She acknowledged in this respect that these groups are not primordial, but instead historically invented and/or socially contracted. She further pointed out that HIs are multi-dimensional with political, social, economic and cultural status dimensions.

With regard to ‘why HIs matter’, FS highlighted four important reasons, including because they hold back individuals in the relatively disadvantaged groups; because they affect economic growth negatively by not using the entire potential of the members of the disadvantaged groups; because they may affect the efficacy of poverty reduction policies by not reaching the relatively disadvantaged and possibly discriminated groups; and, as shown by the CRISE research, because they increase countries’ risk of experiencing socio-political instability, violent conflict and civil war.

She then discussed some data regarding the magnitude of the prevailing HIs in the seven countries where CRISE has conducted research. She also reported on the ten main findings that had emerged from the CRISE research:

  1. In-depth case studies and cross-country as well as within country econometric research shows that the probability of conflict rises where socioeconomic HIs are higher.
  2. Conflict is more likely where political and socio-economic HIs are high and in the same direction, or consistent.
  3. Inclusive (or power-sharing) government tends to reduce the likelihood of conflict.
  4. Citizenship can be an important source of political and economic exclusion, not only at a national but also at regional and local levels.
  5. Inequality of cultural status or recognition among groups is an additional motivation for conflict, and cultural ‘events’ can act as a trigger for conflict.
  6. Perceptions of inequalities are important as well as ‘observed’ inequalities.
  7. The presence of natural resources can be an important source of HIs and conflicts by creating regional inequalities; by provoking resentments about the redistribution of the resource rents; and by creating within region inequalities.
  8. The nature of the state is of enormous importance to whether HIs lead to conflict.
  9. Some HIs are very persistent, lasting centuries even.
  10. Where there are severe HIs, they are particularly important to tackle.

In the final part of her presentation, FS discussed some policy considerations, including the need that policies are comprehensive; the need to take political constraints and reaction into account; the fact that policies can be direct/targeted as well as indirect/integrationist; and the fact that HI-reducing policies can be effective as illustrated by the Malaysian and Northern Ireland experiences.

Discussants

The first commentator, ProfessorTony Atkinson (TA), had five comments. Firstly, he mentioned that scholars in the public finance field had considerable difficulties in defining ‘horizontal’ equity/equality. He also said that it was important to study both the processes which bring about HIs and the actual outcomes. Secondly, he made a distinction between evaluating HIs in a society from a ‘judgmental’ point of view and trying to explain them. With regard to perceptions of HIs, he raised the question whether one had to take these perceptions into account, adding that from a social welfare perspective this was not necessarily the case. Thirdly, while emphasizing the importance of the analytical shift from individuals to groups, he identified two problems: 1) what to do about changing group identities, and 2) what to do with the issue of ‘non-belonging’. Fourthly, he questioned focusing solemnly on the ‘nation-state’ as a unit of analysis. Fifthly, he pointed to the positive role that supranational organisations can play in solving internal conflicts. He explicitly mentioned the positive impact of the EU on the situation in Belgium, Spain and Northern Ireland as well as the Roma population in Eastern Europe.

The second commentator, Joelle Jenny (JJ), raised three points. Her first point focused on how DFID deals with HIs and conflict. She stressed in this respect that development assistance can have an important impact on conflict and that DFID was becoming more conflict-sensitive. She said that DFID now has 30 conflict specialists to analyze the risks of development assistance on conflict. DFID country programmes are currently systematically evaluated regarding their social exclusion and gender impacts. She further acknowledged that DFID had to do better with regard to the issue of HI but efforts were inhibited by lack of good data. Her second point was directly related to this. She said that there was a serious funding shortfall regarding data-creating and monitoring in developing countries. An important reason she identified in this respect was that data issues are ‘not very sexy’. She also stressed the importance of the ‘information loop’ whereby the findings of the country analyses actually feed into the country programmes and projects. A third point she raised was related to processes of group mobilisation. She noted that it was crucial to understand how groups were mobilised in conflict or how conflicts were ‘engineered’. This required understanding when, why and how a political crisis turned into a violent conflict or war; what she called the ‘tipping point’. She continued by saying that in order to prevent crises from becoming violent it was crucial to better understand the carrots and sticks that could be used to affect the behaviour of the drivers of conflicts.

Discussion from the floor

Chris Cramer (CC), Professor of Political Economy of Development at the School of Oriental and African Studies (SOAS), raised several questions/points. Firstly, he mentioned that it was also important to analyze how conflict in turn affected horizontal inequalities. Secondly, he mentioned that sometimes inequalities had beneficial effects. He illustrated this by saying that the gender inequalities were a source of economic growth in Asia. Thirdly, SOMETHING ON REGIONAL INEQUALITY COMPLEXES IN ETHIOPIA Fourthly, he raised the question why HIs were more likely to cause inter-group rather within-group conflict.

Robert Picciotto (RP), Visiting Professor at King’s College, London, made the point that horizontal inequalities could be addressed in two ways: firstly, by addressing all inequalities in general; and, secondly, by using certain incentives to change group boundaries.

Sakiko Fukuda-Parr (SFP), Visiting Professor at the New School, New York, said that in her view the international policy agenda needed to be broadened in order to address the different dimension of HIs.

Alexandra Trzeciak-Duval (ATD), Head of Division, Policy Coordination, at the OECD, Paris, raised two questions: firstly, whether or not the recommended HI-reducing policies were transitional in character; and, secondly, to what extent, demographics were taken into account in the analyses.

Victor Lal made a comment but I did not get it

Andrea Cornia, Professor at the University of Florence, asked how the HI approach worked in homogenous countries like Italy, saying that it was not clear between which groups the inequality was.

Stan Thekaekara (ST), co-founder of ACCORD, raised the point that conflict is not the same thing as violence, and that for many people inequality and conflict is a ‘state of life’.

Emma Grant (EG), DFID, asked which conditions of the enabling environment were likely to make HI-reducing policies more effective.

Khoo Boo Teik, Associate Professor at the Universiti Sains Malasyia, Penang, asked what should be done when the underlying groups on which particular HI-reducing policies were based, were no longer the same or no longer the most relevant groups.

Yvan made a comment here but I was unable to follow

In response to the various comments and questions, FS responded as follows. She agreed with TA that we needed to look at both processes by which HIs are created and the outcomes of these processes. With regard to TA’s comment concerning the nation-state as unit of analysis, FS said that the nation-state was just one level, in addition to regions, sub-federal states and local districts. She further mentioned that the EU experience was exceptional and difficult to replicate somewhere else. In response to JJ’s comments regarding the lack of data, FS noted that this is an important issue that needs to be addressed. Also in reaction to JJ, FS mentioned that sanctions had been shown to be ineffective in changing the behaviour of (potential) drivers of conflict.

In response to CC, she mentioned that she was unaware of a link between gender inequality and stronger economic growth in Asia, and doubted whether indeed such a link existed.In response to ST, she clarified that CRISE is concerned with violent conflicts. She also acknowledged that conflict is human and could be a positive driver for change. In response BP comment, FS mentioned that she was not convinced that we could get writ of group boundaries altogether. In response to ATD, she clarified that HI-reducing policies should indeed have a ‘transitional’ character. In response to ATD’s question whether demographics had been taking into account in the analyses, FS pointed out that age was a variable in the CRISE perceptions surveys which were conducted in the various case study countries. In the subsequent analyses of the survey data, the perceptions of different age groups regarding a range of issues were compared. In response to AC, FS mentioned that in Italy there were also important HIs, particularly between the north and south. She further mentioned that class inequality was not such a good source for violent group mobilization.

Finally, JJ also commented on several of points/questions raised. In response to ST, she said that it was important to understand non-violent conflict as well for two reasons: firstly, they could become violent at a later stage; and secondly, they could be a source for positive change. In reaction to CC, JJ mentioned that within-group inequalities and conflicts are also important issues to be studied. JJ also mentioned that generational issues are important for both within and between groups conflicts.

Session II: Economic Systems and Horizontal Inequalities

Session Leader: Rosemary Thorpe (CRISE) and Arnim Langer (CRISE)

Discussants: Andrea Cornia (University of Florence), Chris Cramer (SOAS), George Gray Molina (UNDP Bolivia)

Notes: Luca Mancini (CRISE)

Session Presentation

Rosemary Thorp: economic dimension of CRISE work

  • Factor markets
  • Institutions (emphasis on informal institutions) and politics
  • Persistence of HIs in Latin America
  • Natural resources (exploration and development)

Arnim Langer: structural adjustment

  • SAP/PRSP
  • Distributional effects
  • Case study: Ghana

Discussants

First discussant: Andrea Cornia - Macroeconomic policies and HIs

Relation between TI and HI. They could move in different directions (e.g., South Africa where TI have increased but HI have decreased), Trends in within-country inequality: out of 85 countries, 60 have experienced increases in inequality, most of them with a u-shaped pattern. These trends are common to developed, developing and transition countries.

Are policies responsible for these trends (In TI/HI)?

  • social policy
  • development policy

Macro sources of TI-HI

  • macroeconomic policies (fiscal compression, monetary policies, pricing policies, exchange rate, privatization, trade liberalization, financial liberalization)

Anti-agricultural bias

Conclusion: TI (and probably HIs) rose in many countries as an effect of macro policies. Proposed a checklist for the impact of macro policies on HIs.

Second discussant: Chris Cramer

HI probably inevitable. But it is degree, variation and change that matter on outcomes such as political violence. Economic systems affect interdependences among people and in turn impact on group identities, interactions and inequality. If people, depend on one another their rival claims will be more muted. Does neoliberal globalisation matter for HIs? It does because it wants to bring about HIs (wages not catching up with productivity creates HIs between groups in society).

Stewart vs Tilly: are they the same? South Africa: ideology, institutions have changed but hi still there.

Third Discussant: George Gray Molina

  • Bolivian paradox

-Growth: 0.3%

-Poverty: 66%

-Gini: 0.60

  • But there are pockets of growth that have helped at times reduce poverty and inequality.

Bolivia is part of G96: poor natural resource-rich countries

Pockets: certified timber, organic trade, fair trade

Certified timber: 17 years ago law was passed which reclassified land and redefined property rights (should be in the hands of indigenous people). This created new political balances. Large job creation effect (15,000 new jobs in El Alto).

How do we reduce HIs in natural resource-rich countries? Can these countries get out of growth-divergence path (very low growth compared to developed countries)? The answer is affirmative if growth is led by export of niche market products (international division of labour)

Redistribution: the benefit went to non-indigenous (this happened also given the fluidity of the ethnic boundaries)

Questions and Discussion from the floor

Stan Thekaekara to George: what is the share of fair/organic trade within Bolivian economy and globally?

Robert Picciotto to George/Arnim: Why Bolivia is a positive case scenario while Ghana is a negative case (but positive and negative in what sense?)

Procurement Guy (?) to everyone: absence of discussion on government procurement policies in reducing HIs. Yet procurement policies used in many countries to deliver economic policies more broadly but also for redistribution purposes (e.g. Australia with aborigines; or Malaysia)

Barbara Harris-White

  1. Inequality embodies conflict but conflict does not necessarily erupt into violence. How does ethnicity and class map together in the def. of HIs
  2. How does Crise theorize contradictory processes (what processes?)

Frances Stewart to Chris Cramer: groups are often deeply trapped into poverty and destitution (unlevelled playing field), it is not just ideology

Frances Stewart to Procurement Guy: most people look at public expenditure (who goes to school) and do no look at procurement of to whom is running the schools which is possibly more important. CRISE is looking at that.

Arnim Langer to Andrea Cornia: suggestion of a checklist for macro policies is a good suggestion.

Arnim Langer to Barbara H-W: all dimensions of HIs interact. Part of the analysis is trying to understand these interactions and how they complement, substitute of conflict with each other.

Rosemary Thorp to Chris Cramer: agree on the importance and interplay of class and ethnicity.

Rosemary Thorp to Andrea Cornia: there is something extra in the concept of HI which has to do with persistence which goes over and above individual deprivation.

Rosemary Thorp to Procurement Guy: it is difficult to use affirmative action policies in societies which have deep HI but where these are not spoken about, acknowledged, or are latent.

George Molina to Stan: Fair trade 1/3 of the Bolivian economy. It is very small globally. Only 10% of organic trade in the “south”, but 90% of fair trade is in the “south”.

Final Remarks from Discussants

Andrea Cornia: should have policies that reduce total inequality and HI in particular

  • Capital account
  • Exchange rate policies effective with export-oriented countries
  • Trade liberalization: it is almost always unequalising
  • Privatization: provokes tensions of the hi side

Chris Cramer: in Mozambique inequality is rural. Should we not look at domestic violence?

George Molina: no break of the glass ceiling until converging with rich club of countries (higher economic growth).

Session III: Political Horizontal Inequalities

Session Leaders/Presenters: Raufu Mustapha (CRISE) and Corrine Caumartin (CRISE)

Discussants: Khoo Boo Teik (Universiti Sains Malaysia), Riwanto Tirtosudarmo (The Indonesian Institute of Sciences), Richard Asante (University of Ghana)

Notes: Frances Stewart

Session Presentation

Presentation 1: West Africa and Malaysia – Raufu Mustapha

1. This presentation is structured around four broad themes:

(a)A glimpse of the nature of political inequalities in the African and Asian countries studied;

(b)A summary of some of the policies advanced to tackle the observed inequalities;

(c)An examination of the institutional consequences of the policies;