Economic inequality, democratization and civil conflict : Measuring the long-run effects

Abstract

The democratization literature has suggested the possibility of a dynamic interplay between democratization and civil conflict. In this thesis I argue that regime changes and civil conflict in many instances are so closely associated, that they should be studied in conjunction. I develop an analytical framework where economic inequality is seen as an important determinant for the speed and ease of democratization, and for the amount of civil conflict observed during its course. High inequality is hypothesized to both cause regime instability and violence.

Using a cross-sectional time-series dataset consisting of 164 countries observed between 1960-2010, I estimate a multinomial logit model of changes to countries' regime type and conflict level. Further, I use this model to simulate the long-run development of political regimes and civil conflict over a time-span of 40 years, taking the level of economic inequality into account. I extend a simulation routine developed in Hegre et al. (forthcoming), where civil conflict and the political systems in the world are endogenous, and evolve in accordance with the estimates of the multinomial logit model. The explanatory variables are assumed exogenous and kept at a constant level. Doing this, I am able to measure the overall effects of inequality on democratization and on conflict incidence, by capturing the reciprocal causality between the two events, as well as the impact from previous regime and conflict history.

The analysis provides support for the hypothesis that high economic inequality increases the amount of conflict in the long run, as well as the proportion of years with partially democratic institutions. High inequality seems to make complete democratization more difficult to achieve.