Economic Inequality and Internal Conflict in India during the Modi Era

The effect of economic inequality between culturally defined groups on internal conflict has sparked discourses in various academic disciplines. According to the “horizontal inequalities” school, greater inequality raises the risk of conflict. In contrast, the “contest theory” view maintains that lessening inequality may lead the disenfranchised to challenge the privileged group, which in turn will fight back to defend its privileges. We test these hypotheses with recent data from India. Taking all 170,000 internal conflict events reported in the Armed Conflict Location & Event Data (ACLED) since 2016 together, we find that conflicts have increased faster in areas where the economic gap between scheduled castes and tribes and other caste groups has widened. Conversely, explicitly caste-related conflict events have increased more in areas where scheduled castes and tribes have caught up with other caste groups. These findings are consistent with a model of intersectional identities where privileged social identities fear contestation while class identities are susceptible to horizontal inequalities.

Stefan Klonner joined Heidelberg's South Asia Institute as Professor of Development Economics in 2010. He earned a master's degree in statistics and econometrics from the University of Utah in 1996 and a Ph.D. in economics from the Ruprecht-Karls University, Heidelberg, in 2001. Previously, he has held positions as postdoctoral fellow and visiting lecturer at Yale University, assistant professor at Cornell University, and Professor of International and Development Economics at Goethe University, Frankfurt am Main. His research focuses on microeconomic aspects of low-income economies, in particular credit, insurance, health, poverty targeting and impact evaluation of welfare programs. His regional specialization is South India, where he has carried out several data collections and field studies.