Poverty, Social Divisions and Conflict in Nepal

by Quy-Toan Do & Lakshmi Iyer

Overview — More than 70 civil wars have occurred around the world since 1945. Understanding what causes such violent conflicts to begin and then fester is a topic of increasing research interest to economists. In Nepal the conflict known as "the People's War" began in 1996 and spread to all parts of the country, resulting in the deaths of more than 13,000 people. Do and Iyer considered a wide range of economic and social factors that they hypothesized could affect the likelihood of violent conflict, and econometrically examined their relationship with conflict intensity. These factors include geographic conditions (mountains and forests), economic development, social diversity including linguistic diversity, and government investment in infrastructure. Do and Iyer's nuanced approach allowed them to examine the spread of a single conflict across different parts of the country and over time. Key concepts include:

  • In the initial stages of the conflict, total deaths caused by Maoist insurgents and government forces were higher in areas with greater poverty. Yet this relationship with poverty changed over time: As Maoists gained control of the poorest areas, the highest intensity of conflict shifted to places that were somewhat better off.
  • Conflict intensity was higher in areas with geographical characteristics that favor insurgents, such as mountains and forests.
  • There was no significant relationship between conflict intensity and linguistic diversity. The relationship with caste polarization was slight.
  • The changing relationship with poverty suggests that researchers need to consider a conflict's prior evolution in their broader analyses.

Author Abstract

We conduct an econometric analysis of the economic and social factors which contributed to the spread of violent conflict in Nepal. We find that conflict intensity is significantly higher in places with greater poverty and lower levels of economic development. Violence is higher in locations that favor insurgents, such as mountains and forests. We find weaker evidence that caste divisions in society are correlated with the intensity of civil conflict, while linguistic diversity has little impact.

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