Economic Explanations of Political Violence

1
Economic Explanations of Political Violence

• Terrorism in Historical Context
• Department of Social Science History, Political
  History16 February 2006
• Juhana Aunesluoma
• Department of Social Science History, Political
  History
• http//www.valt.helsinki.fi/blogs/jauneslu
• juhana.aunesluoma_at_helsinki.fi

2
Lecture themes

• economic issues in the current policy agenda and
  debate over war on terrorism
• the post 9/11 shock debate and the following
  root causes debate on terrorism and political
  violence
• some basic assertions about economic explanations
  of political violence
• the relationship of economics and violence in
  world politics
• classical arguments and contemporary analysis of
  the commercial peace
• evidence on case studies
• Northern Ireland, Algeria, Peru and Yugoslavia

3
Current agenda analysis and policy debates

• what is the role of economic and social factors
  in the rise of terrorism
• what is the relationship of the economic and
  social explanations with other, political,
  cultural, religious or psychological
  explanations?
• what is the effect of globalisation on terrorism
  and political violence?
• what is the significance and function of diaspora
  communities for terrorism?
• what types of economic and social policies can be
  applied to fight terrorism or address its
  underlaying causes?
• what are the goals of terrorists?

4
The post 9/11 shock debate

• the shock of 9/11 and instant explanations
• the symbolism of the attack the pillars of US
  hegemony economic, military and political might
• the work of evil? psychological pathologies?
• the role of religious extremism? apocalyptic or
  millenarian beliefs?
• responses to US economic exploitation? responses
  to the US, or other Western pursuit of economic
  self-interest?
• does global market economy breed violent
  discontent?
• is terrorism the outgrowth or sideproduct of
  globalisation?
• terrorism as a desperate call for help from the
  poor?
• the root causes debate
• immediate motivations (triggers) and underlying
  structures
• how to fight terrorism?

5
Two poles of debate

• psychological explanations of political violence
  gt psychologisation or individualisation
• personal or group psychological and
  socio-psychological explanations of extreme forms
  of political violence and terrorism
• level of analysis individual or small group
  behaviour
• economic and social explanations of political
  violence gt structuralisation
• individual behaviour motivated by social and
  economic conditions, changes therein or
  aspirations to change them
• levels of analysis large groups or classes,
  societies, nations, the international system
• of course political, systemic, ideological,
  institutional etc. models as well

6
Claims made about economic motivations

• deprivation of basic social and economic rights
  motivates political violence
• political violence or terrorism as a response to
  structural violence
• experience of social injustice gt social
  revolutionary terrorism
• rapid modernisation and high economic growth
  correlates with ideological terrorism
• rapid societal transformations, rapid
  redistribution of wealth (rapid one generation
  or less)
• replacement of traditional norms and social
  structures with new the appeal of radical
  ideologies (Hitlers Germany, the appeal of
  extremism in the Middle East)
• failures to integrate emerging social classes
  into the political system
• strong fluctuations of economic cycles correlate
  with the occurence of political violence
• 1870s-1890s, 1930s, 1970s, 1990s

7
Poverty and terrorism claims

• claim poverty motivates political violence
• fighting poverty is fighting terrorism
• Tore Bjorgo (summing up a debate held in Oslo
  2003) there is only a weak and indirect
  relationship between poverty and terrorism
• this applies on the individual level
• terrorism seems to be understood fairly narrowly
• hardly closes the debate
• the poor or the poorest do not necessarily have
  the means to embark upon terrorist acts,
  especially of the international type (Sub-Saharan
  Africa etc.)
• other forms of terrorism political violence,
  state terrorism
• why commit acts of terrorism IN the poorest
  countries in the first place?
• what are the aims of the terrorists? what types
  of societies are sought by terrorist means?
  poverty irrelevant?

8
About concepts

• political violence
• wider concept, includes terrorism, but also other
  forms and violence on different levels of
  intensity and legitimacy
• civil wars, genocide, rebellious or revolutionary
  warfare, guerilla warfare, riots, political
  murders and assassinations
• any actual or potential violation of anyones
  basic rights
• structural violence
• violence that inheres in social roles, norms and
  patterns
• deprivation and social injustice
• types and phases of terrorism
• ancient, old, new, social revolutionary (or
  leftist), state terrorism, state sponsored
  terrorism, international, apocalyptic,
  superterrorsim, ecoterrorism

9
Commercial peace classical arguments

• the indivisibility of economics and politics
• mercantilism, enlightenment and the study of the
  wealth of nations
• the democratic peace and the commercial peace
• Charles-Louis de Secondat Montesquieu
  (1689-1755), Immanuel Kant (1724-1804), Woodrow
  Wilson (1856-1924)
• assumption economic interdependence fosters
  peace
• free trade increases trade
• trade increases interdependence gt
  interdependence brings peace gt peace increases
  trade gt
• 20th century thought economics and security not
  only commercial peace but also commercial warfare
• John Maynard Keynes (1920), Albert Hirschman
  (1945), Eugene Staley (1935), E.H. Carr (1939)
• K. Marx and V.I. Lenin (1916) the capitalist
  economic system inherently unstable imperalism
  and capitalist war

10
Commercial peace current research

• no automatic link between economic
  interdependence and peace
• but war between commercialy interdependent
  democracies is less likely than war between other
  forms of government or economically
• economic dependence asymmetric relationships
  potentially problematic
• contested asymmetries
• changes in interdependence or dependence
• a changing relationship potentially probelmatic
• the question of scarce factors of production
• intervening variables crucial the nature of
  economic relations
• commodity composition of trade, financial
  relations, foreign direct investments,
  indebtedness, geography (proximity or distance),
  how many countries are involved in the
  relationship or model (dyadic or what?)

11
Globalisation and political violence

• globalisation and modernisation
• the emergence of new types of societies as an
  outcome of intensified economic, cultural and
  social contact with other societies
• Middle East, South East Asia, post-communist
  states
• economic globalisation time-series analysis (Li
  Schaub, 2004)
• trade, foreign direct investment (FDI), and
  portfolio investment have no direct positive
  effect on transnational terrorist incidents
  within countries
• economic developments of a country and its top
  trading partners reduce the number of terrorist
  incidents inside the country
• economic development have an indirect negative
  effect on transnational terrorism

12
Primary commodities and violent conflict

• the World Bank conflict research group
• primary commodity exports and civil wars
• debate between marxist and other approaches
• political, institutional and materialistic
  explanations
• positive correlation between a countrys
  propensity to experience civil war and its
  dependence on the export of primary commodities
  (Collier and Hoeffler 2002)
• robustness of statistical analysis has been
  debated
• but a clear link between natural resources and
  civil wars
• resource abundance and vulnerable, low-capacity
  states
• the curse of natural resources
• the rebel greed hypothesis
• what commodities or resources?
• territory, oil and water most important?

13
Case Northern Ireland 1960s

• intensified violence along the Northern
  Ireland-Republic of Ireland border 1956-62
• catholic population social and economic problems
• NI premier Terence ONeill (1963-69)
• reforms, economic management, hands-on social
  improvements
• a long term program for catholic integration
• bridge-building to the Republic
• civil rights movement
• the catholic middle class improved prospects
• intensified claims about a better future
• Campaign for Social Justice (1964-68)
• 1968 tensions blow up, civil rights march ends
  in violence
• rapid escalation of violence the troubles
• British troops sent in 1969, low intensity war,
  terrorism

14
Case Algeria 1992-

• dominant view political violence caused by
  religious, ethnic and political factors
• economic deterioration and the socio-economic
  factors must be considered as well (Testas 2001).
• economic decline and economic marginalisation
• a launching pad for civil war and violence
• basic economic data as basis of the analysis
• oil price collapse 1986 a crucial event
  triggering political instability and violence
• 1992 zero-growth, consumption actual decline
• cumulative effects of decline felt poverty cycle
• unemployment, lack of investments (foreign)
• violence begins aggravates economic problems
• popularity of the islamist movement, to some
  extent, a function of economic decline

15
Case Yugoslavia 1990s

• Neo-Darwinian analysis (Silverman and Case,
  2001)
• natural selection favors pragmatism and
  plasticity in the formation of group alliances
• the primacy of pragmatism
• arguments
• ethnocentrism NOT the main cause for possibly
  violent group behaviour, just rationalisation
  rather than root cause
• motives for inter-group oppression and warfare,
  including so-called ethnic cleansing movements,
  are economic
• gt groups engaged in political violence and
  terrorism may be formed pragmatically
• gt economic motivations may create a common
  interest, surpassing ethnic differences
• evidence presented on the years preceding the war
  in Yugoslavia in the 1990s
• economic stagnation and decline in the 1980s and
  the rise of ethnocentrism NOT coincidental but
  causally related
• economic decline led to hardening of ethnic
  attitudes

16
Case Peru 1990-1995

• president Alberto Fujimoris fujishock program
  
• neo-liberal economic stabilisation program
• control of terrorism was a precondition to
  implement the program and to maintain the
  presidents popular support (Holmes Amin
  Gutiérrez de Pineres 2002)
• the poor targets of terrorism and
  counterterrorist actions
• neoliberal reforms and political stability
• domestic and foreign investment crucial for
  reforms
• reliance on functioning of financial markets and
  currency stability
• low country risk required
• political violence inimical to reforms of this
  type
• political context crucial for succesful economic
  reforms
• preceding economic crisis aggravated by terrorism

17
References

• Quan Li Drew Schaub, Economic Globalization
  and Transnational Terrorism A Pooled Time-Series
  Analysis, Journal of Conflict Resolution,
  2/2004, 230-258
• James Ron, Paradigm in Distress? Primary
  Commodities and Civil War, Journal of Conflict
  Resolution, 4/2005, 443-450
• (includes Collier and Hoeffler)
• Abdelaziz Testas, The Economic Causes of
  Algerias Political Violence, Terrorism and
  Political Violence, 3/2001, 127-144
• Irwin Silverman Danielle Case, The Role of
  Ethnic Nepotism vs Economic Pragmatism in
  Inter-group Conflict Data on the Yugoslavian
  Civil War, Journal of Bioeconomics, 3/2001,
  91-98
• Jennifer S. Holmes Sheila Amin Gutiérrez de
  Pineres, Sources of Fujimoris Popularity
  Neo-liberal Reform or Ending Terrorism, Terrorism
  and Political Violence, 4/2002, 93-112.
• Todd Sandler, Economic Analysis of Conflict,
  Journal of Conflict Resolution, 6/2000, 723-729
• Patrick MacDonald, Peace through Trade or Free
  Trade?, Journal of Conflict Resolution, 4/2004,
  547-572
• Rafael Reuveny William R. Thompson, World
  Economic Growth, Northern Antagonism, and
  North-South Conflict, Journal of Conlict
  Resolution, 4/2002, 484-514