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Economics of inequality and conflict

Opening lecture at University of Florence on economic modeling and civil conflicts
01 Dec 2017
24 November 2017

(1 December 2017) Students recently gathered for the opening lecture in the University of Florence School of Economics and Management’s new lecture series on development economics, given by Jose Cuesta Chief of social and economic policy at UNICEF Innocenti.

Cuesta’s lecture, titled Inequality, Redistribution and Conflict, presented an economic perspective on conflict and inequality, through examination of economic models influencing current events. The presentation zoomed-in on recent examples of civil conflict in Honduras and Zimbabwe, looking at the effect of inequality on the costs of war and how these variables may have affected political stability.

Mothers and children near the coast shortly after arriving in Cox's Bazar District, Bangladesh. The three spent seven days on a bank of the Naf River in Myanmar before making the crossing aboard a fishing boat.

Research on the link between inequality and conflict is important for UNICEF – a leading humanitarian response agency in countries affected by conflict.  “Understanding how conflict emerges and pervades is critical for our work, both in terms of contextualizing our programming and ensuring it contributes to solutions,” said Cuesta. Equity, for example, is one cross-cutting pillar that is intimately related to conflict, he added.

In his lecture, Cuesta presented economic models that attempt to measure the role of inequality as a contributing variable in predicting a conflict. Some models, he emphasized, could be tailored to work for very specific situations, but measuring inequality as well as factoring in the many different cultural contexts that exist for different countries and states, has proven to be a challenge for developing universal economic models for conflict.

Cuesta noted, “a model that can be only used for one country is not a very useful model. The economic model of conflict provides a set of principles that are useful to understand certain dynamics of conflict – but not all... we can come up with variables with more resolution, including those of culture, social norms, perceptions and attitude. That would require more precise instruments of data collection. And then we need to better explain the results our analytics provide.”

There are several ways in which poverty or inequality can affect conflict, according to Cuesta. “A researcher cannot pick up the argument that best suits his or her theory. Here, the role of mixed methods is a good alternative,” he said. For example, looking at how conditions of unequal voice and participation can potentially both reduce and accelerate conflict (by either squelching opposition or fueling grievances) is an area where qualitative research could be used to determine the chances a given country has of experiencing civil war. More granular and country specific work is needed, he stressed, in order to create better models.

Jose Cuesta, UNICEF Innocenti's Chief of Social and Economic Policy, delivering his lecture titled 'Inequality Redistribution and Conflict' to open a new lecture series on development economics at the University of Florence, School of Economics and Management.


[READ about UNICEF Innocenti’s emerging research initiative to analyse the effects of conflict and crisis on adolescent health]

Improving our ability to measure inequality is also crucial for better research. “As it is the case to measure poverty, or child wellbeing, in order to measure inequality, we first need more frequent data. Waiting 5 or 10 years to have a chance to measure is completely inadequate,” Cuesta said. “In fact, we know much more of the ultra-poor than the ultra-rich. A possible solution to this problem is to gain more anonymous access to tax records. When this access is allowed, the payoffs are huge,” he added, referencing the World Wealth and Income Database, which has greatly improved the diagnostics of inequality around the world.