Do government transfers reduce civil unrest?
- By: Patricia Justino
- Mon 25 May 2015
The past few years have seen an increase in civil unrest across the globe, from food riots to the Arab Spring and the Occupy movement in the United States and other countries. These events have been linked to rises in economic and social inequalities and social exclusion, which have resulted in the accumulation of social discontent.
Civil unrest has been present throughout history. There is, however, limited evidence about the type of policies that may be used to mitigate civil unrest or prevent its escalation into widespread violence. My recent paper provides evidence for the role of government transfers in either mitigating or preventing civil unrest in India.
The idea of governments resorting to the provision of goods and services to maintain stability is not new. German Chancellor Otto von Bismarck planted the seeds of the first social insurance programmes in Europe in the late 19th century as a response to social demands from increasingly stronger workers unions’ movements after the Industrial Revolution. He saw the Sozialstaat— the origins of the European welfare state—as a means to win the new German proletariat’s loyalties and keep class struggle under control.
Nevertheless, despite a vast literature on the links between inequality, government institutions and social conflicts, little is known empirically about the impact of government transfers and redistributive policies on civil unrest, or about the effectiveness of the provision of public goods and services in mitigating civil unrest and the escalation of violence.
The paper makes use of a longitudinal dataset across 16 major Indian states for the period 1960–2012. Empirical results show that, whether intentional or not, and despite the small amounts spent, a close correlation exists between government expenditure on social services and the reduction of civil unrest in India: the data analysis revealed that past levels of government expenditure on social services are associated with statistically significant reductions in rioting.
There is at least a one-year time lag in the effect: the effect of current expenditure has no statistically significant effect on rioting, which is likely to be caused by the delay between government expenditure and its impact on levels of social discontent. There is no evidence to show that the use of repressive mechanisms, such as the use of police, is an effective tool in the reduction of unrest.
Further analysis on mechanisms shows that the reduction in rioting in India caused by government transfers is most likely due to its effects on poverty. Effects on inequality are mixed and not conclusive. The effect of government transfers may be due to their preventive nature: transfers contribute towards the socio-economic protection of the most vulnerable groups of the population, addressing important sources of social discontent.
This is an important result, with implications for the management of rioting in India—a common phenomenon across the country. India’s religious, social and political diversity has often given rise to clashes between different population groups, and between these population groups and the government. In fact, since India’s independence in 1947, almost 40 000 people have been killed or injured in riots in India.
Despite being extremely violent at times, civil unrest in India has not resulted in full-scale civil wars, as in other parts of the world. The results suggest that this may be (partly and probably unintentionally) due to India’s democratic system, which addresses demands from various social groups. If this assumption is correct, it may have important implications for other parts of the world where civil unrest is high or on the rise.
The results also have implications for how we understand the relationship between state capacity and political violence. The literature on political violence has largely focused on the ability of the state to impose the rule of law and establish a monopoly on violence. The research summarized in this paper suggests that fiscal capacity may also be important, because it will determine whether (and if so, how) governments may be able to provide public goods to their citizens.
This blog post is published as part of a collaborative partnership between SIPRI and Economists for Peace and Security (EPS).