Implications of an Economic Theory of Conflict: Hindu-Muslim Violence in India
We study inter-group conflict driven by economic changes within groups. We show that if group incomes are “low”, increasing group incomes raises violence against that group, and lowers violence generated by it. These predicted relationships demonstrate the complex connections between economic growth and violence, and in particular serve as tests for group aggression or victimization, which we apply to Hindu-Muslim violence in India. Our main result is that an increase in per-capita Muslim expenditures generates a large and significant increase in future religious conflict. An increase in Hindu expenditures has negative or no effect. This robust empirical finding, combined with the theory, has direct implications for the origins of Hindu-Muslim violence in post-Independence India.
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