These range from the full scale armed conflict of a civil war (between two “states within states”), through relatively isolated and contained low intensity insurrection against the state, to regular bouts of communal violence in a “well functioning” state.
This paper asks how poverty and inequality causally interact with these phenomena. The causality from conflict to poverty is not much in doubt and stands to reason—conflict destroys or impairs incentives for productive economic investment and innovation at all levels. However, the precise nature of causality in the other direction, from poverty and inequality to conflict, is more ambiguous and subject to greater debate. It is this causal chain that is the focus of this working paper; but in order to do this we in turn need a more nuanced characterization and discussion of inequality and poverty concepts and trends.