Ambiguity of the Poverty-Wars Nexus

by Ambika Sharma

The exaggerated media coverage in the West makes one readily believe that violence and low economic status are correlated. Images of poverty stricken children in slums coupled with a fairly extensive coverage of civil wars, leaves an impression that low economic status and violence go hand-in-hand. Nevertheless, there is some truth to the perceived correlation; for example when a brutal civil war broke out in Sierra Leone in 1991, it was one of the world’s poorest countries with a Gross National Income (GNI) of $180 (Graff, Lewis & Rice, 2006). In addition, Ivory Coast witnessed its first civil war since the independence in 1960, when it experienced a GNI decline from $1,120 in 1980 to $650 in 2000.

From Ivory Coast in Africa to disaster and war prone Haiti in the western hemisphere, there has been an increase in civil wars predominantly in poverty-stricken economies. Hence, it is only logical to assume that ‘poverty’ does in fact cause wars as low levels of domestic economic activity creates incentives for an increased number of conflicts triggered from grievances and anger.

These conflicts further cripple economic growth and a vicious poverty-conflict trap persists, which stokes further conflict. If the relationship between low economic status and wars were this unilateral, then the hypothesis is stretched to its limits in the anomalous case of Malawi, which remains relatively peaceful despite being one of the world’s poorest countries. This fact spurs doubts whether the high levels of economic growth lead to an elimination of wars and civil conflicts.

However, given that the past decade has witnessed a considerable rise in intrastate wars due to ideological differences in the wake of the end of the Cold War, an understanding of the relationship between poverty and war is essential for policy decisions in war-torn regions, with an emphasis on risk reduction as these regions are incubators for transnational security threats by various insurgent groups and weapons proliferation across porous border. The rise of the Taliban insurgency in Afghanistan, which operates out of Pakistan, is a contemporary reminder of the potential nexus between security and development paradigm.

“Grievance is to a rebel organization what image is to a business”
Paul Collier in Leashing the Dogs of War: Conflict Management in a Divided World

Paul Collier, a notable researcher in this field, argues through his ‘greed’ model that it is predominantly greed and money than grievance that leads to conflicts. He conducts an economic study and examines the correlation between poverty and wars as wars cannot just be fought on the premises of hopes/hatred (Collier, 2007). He applies econometric analysis that takes civil wars as the dependent variable and formulates that conflicts are ‘feasible’ wherever they are possible, regardless of motivation. This result implies that whenever there is an opportunity to materially benefit from a conflict, there will be one. Rebels and rebel groups are seen as rational utility maximizers, representing a homo economicus in the most conventional sense. In Afghanistan, young Afghani men are willing to join the Taliban insurgency not necessarily due to ideological or religious affiliations, but due to the financial benefits that such collaboration confers. Consequently, insurgent groups tend to exploit people’s grievances and poor economic conditions as a recruitment tactic, implying that an insurgent group’s ability to acquire financial assets and liquidity are crucial for its operations.

Collier further claims that as the policymakers have neglected the economic dimensions of civil wars, a substantial opportunity to promote peace has been missed. This claim gives an ‘economic’ explanation to the ‘why’ wars happen. Moreover Susan E. Rice, the U.S. Ambassador to the United Nations, supports Collier’s findings to a certain extent that though greed plays a role, a country’s per capita level of income is also an essential criterion (Rice et al, 2006). She challenges the popular notion that civil conflict originates from ethnic, religious or cultural differences echoed by primordially-leaning authors. Rice highlights the relationship between state capacity or per capita income and conflict risk, giving due consideration to economic stability as a deterrent to future conflicts.

Most notably, Collier finds that the risk of civil wars has been systematically related to a few economic conditions, namely the percentage of primary commodity exports (Collier, 2007). Though these resources present comparative advantage and an enhanced bargaining power to a country, a heavy dependence on them can also prove detrimental. Collier claims that countries relying heavily on exports of primary commodities are at a higher risk of conflict, with the ‘dangerous’ level denoted as 26% of GDP depended on commodity export culminating into a 23% risk of conflict. It is interesting that a country without any primary commodity export has a 0.5 to 1% risk of conflict. This difference implies that the presence of primary commodities makes a country more prone to conflict. The Nigerian Biafra war of 1967-70 corroborates Collier’s claim, a war erupted over the control of Nigerian oil with approximately four million people dying from famine and other war-related causes. This conflict took place regardless of the overall national per capita income growth, further justifying Colliers finding that the presence of commodity exports are more dangerous than the level of per capita income.

As each society is different, Collier’s econometric analysis has been criticized by many experts, especially Blomberg and Hess, as it conceptualizes the link between poverty and conflict as merely economic causation and overlooks the social and political dimensions of poverty (Blomberg & Hess, 2002). Collier ignores the fact that poverty is often a social issue stemming from the failure of political institutional mechanisms that deprive people of some basic entitlement rights and causes inequality. The emphasis in Collier’s model is on vertical inequality rather than horizontal inequality, i.e. the economic variations between different strata of society. Furthermore, the effect of outside interventions into civil wars and a study of whether outside involvement prolongs or terminates civil wars have also been overlooked by Collier.

Policy Implications for the United States
A recent study by the Center for Global Development, encourages foreign aid by donor countries as these risky investments yields high returns in the form of enhanced reputation among the local population and can lead to an improved credibility internationally, making it difficult for insurgents to exploit peoples’ emotions and discontent (Brown & Patrick, 2006). The target of this strategy are insurgent groups that often either lure or coerce people into fighting in zones of conflict, such as Al-Qaeda, which has managed to gain pockets of support in poorer countries such as Sudan and more recently in Yemen.

According to the Office of Development Assistance, U.S. foreign assistance increased from 0.16% of U.S. GNI in 2007 to 0.19% in 2008, rising from $27.6 billion to $37.7 billion. However, this rapid increase has been due to the recent increase in aid to Iraq and Afghanistan, with a subsequent decrease in aid to other potentially important regions, such as in Sub-Saharan Africa, and could be a destabilizing factor for regional security. When focusing on foreign aid in war-torn regions, with a goal of combating terrorism, Rice exerts that the weakest areas of U.S. foreign assistance programs has been combating poverty and contributing towards improved governance in weak states in a meaningful way. Poverty reduction strategies and economic growth should be one of the key areas of U.S. foreign assistance to mitigate threats to U.S. security. Poverty reduction strategies in conflict-ridden societies invariably require the deconstruction of the political economy of wars and illicit activities, replacing it with viable institutional mechanisms that ensure that the rules of the game are maintained. Foreign assistance needs to be channeled in the most efficient manner that avoids the tentacles of corrupt institutions.

The United States needs to be more involved with the local population and government when disbursing funds and focus on providing basic education and health services to people in an attempt to rebuild its trust and credibility among the locals. For economies that heavily depend on commodity export, the U.S. approach should emphasize on diversifying economies and allocating profits back into the economy of the respective state for social services. Such policies would ardently address the social dimension of a war by enhancing long-term infrastructure and human development needs, and by reducing the opportunity for future conflicts, killings, grievances, and cross-border terrorism.

Addison, T. & Murshed, S. M. (2003). Explaining Violent Conflict: Going Beyond Greed Versus Grievance, UNU/WIDER Special Issue on Conflict, Journal of International Development, 15(4), pp. 391-396.
Blomberg, B. S. & Hess. G. D. (2002). The Temporal Links between Conflict and Economic Activity, The Journal of Conflict Resolution, 46(1), pp. 74-90. Collier, P. (2007). Economic Causes of Civil Conflict and Their Implications for Policy In Leashing the Dogs of War: Conflict Management in a Divided World. The United States Institute of Peace Press, Washington, D.C.
Collier, P. (2009). Post-Conflict Recovery: How should Policies be Distinctive?, Journal of African Economies, 18, pp. 99-131.
Graff, C., Lewis, J. & Rice, S. E. (2006). Poverty and Civil Wars: What Policymakers Need to Know, The Brookings Institution Global Economy and Development Working Paper.
OECD Department of Statistics (2010). Aid Statistics. Retrieved April 11, 2009 from,3355,en_2649_34447_1_1_1_1_1,00.html
Patrick, S. & Brown, K. (2006). Fragile States and U.S. Foreign Assistance: Show Me the Money, Center for Global Development Working Paper 96. Retrieved April 1, 2010 from:

Ambika Sharma is a student in the Master’s program in Quantitative Economics and Finance at the University of St. Gallen in Switzerland, with an ardent interest in political science and U.S. foreign policy.

Email Ambika Sharma at



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