Government Involvement in the Economy Increases Ethnic Rebellion

Stephen Saideman, Ph.D., and David Steinberg, M.A., compiled data for a large number of countries on their levels of ethnic conflict and the extent to which the government versus the free market controlled the economy.

Results show that ethnic conflicts rarely turn violent in free market economies. However, ethnic civil wars are a more frequent occurrence in countries where the state plays a large role in the economy.

The study also shows that economic policies that clearly redistribute income across different ethnic groups are most detrimental to ethnic group relations. Redistributive policies such as price controls, industry regulations, and restrictions on the flow of international investment are strongly associated with ethnic violence. This finding implies that ethnic violence may often be driven by concerns of economic insecurity.

“Our research contradicts the prevailing conventional wisdom that globalization and its associated reduction of government involvement in economies exacerbates ethnic conflict,” the authors conclude. “The study challenges the claim of many ethnic activists who argue that greater government control over economic activity is likely to reduce ethnic strife.”

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