Part Four of a Series

In the age of globalization, the gap between high and low income countries is not only persisting, but in many cases it is widening, as the OECD (Organization for Economic Cooperation and Development)[1] has shown in its study of Luxembourg. While the existence of such a divide is unquestionable, its origins, structure, and consequences are not. Could one, for example, securely say that income gaps lead to conflict? Is it possible to relate intractability to this divide? Rather than answer these thorny questions, this article explores the debate with the aim of identifying its key arguments. But first, it is necessary to clarify some concepts.

Rich-Poor Relations and Social Conflicts

The development discourse and practice has been based on a rational approach that assumes that economic growth benefits all society, reducing both poverty and inequality. "Good" development, moreover, would be achieved by those LDCs that follow Western political institutional models, echoing Truman's view of "development based on the concepts of democratic fair dealing." However, it is clear that in at least two sectors important to rich countries, cotton and milk, the dealing has been far from fair.

This may have some implications for social conflicts in LDCs. Recent research carried out for the World Bank by Fajnzylber et al., for example, claims to have found substantial evidence indicating a sharp increase in violence during the last decade of ever-increasing globalization.[2] This violence was measured using recorded homicide rates in both the two poorest regions of the world (Latin America and sub-Saharan Africa), and where growth of inequality has been fastest (Eastern Europe, Russia, and Central Asia).

Additionally, econometric research on Brazil carried out for the World Bank has found increasing demand for public safety in both poor and richer neighborhoods.[3] These studies show that both poverty and inequality have risen in the last decade. By 1998, 1.2 billion people still lived on less than a dollar a day, and 2.8 billion on less than two. If so, the "quality" of development has been widely compromised. A development that takes place without "quality," that is, without fairness, is a development undermined by intense and diverse forms of social conflicts.

While figures on crime may illustrate the situation, there are dimensions to current relations between rich and poor countries that both reveal the depth of inequality between the two as well as possibilities of transforming or resolving this disparity and its resulting social conflicts.

First, the dual behavior of rich countries has undermined LDCs' faith in the possibilities of alternative dispute resolution (ADR) methods. This is partially because dispute settlement mechanisms existent at the global level (like those from the World Trade Organization -- WTO), have not been able to counter rich-countries' biased trade policies. Also, the Western framework of democratic institutions that has given support, and meaning, to economic liberalism and therefore to "fair dealing" has itself been called into question. There is therefore a vacuum of meaning in Western democratic institutions that support ADR.

Second, expanding inequality has reinforced the power of local elites in LDCs, who, in many cases, achieved prominence under a colonial power. The situation today could be called a "new colonialism" with two levels. The first level involves the power of the rich over the majority of the poor. The second has to do with the use of that power in relation to globalization: within the unstable political and economic setting of LDCs, inside information is vital for international businessmen. Those who hold economic, political and/or informational power in LDCs are in a position to channel investment and/or development where they want. The overall result is an even larger imbalance of power, which restrains fair negotiation and conflict transformation/resolution practices. To some extent, local-scale rich-poor conflicts mirror the conflicts between LDCs and the rich nations.

Third, the contradiction between rich nations' development aid intentions and their actual trade practices has a negative result among LDC populations. A country's commercial practice, like its culture, can be, rightly or wrongly, identified with its people's beliefs. American trade practices, for example, are the practices that Americans supposedly defend. It could be argued, therefore, that the attacks on the World Trade Center and the Pentagon were attacks on what the perpetrators' identified as symbols of the main source of LDCs' growing poverty and inequality: American trade policy and its military.

Development economics also have to do with human values. Globalization brings about a change in people's lifestyles and behaviors. Forms of alternative income earning have grown faster than formal and secure employment. Global companies have maintained control over planning, and sent to LDCs all stages of production that involve financial and human risk. Life in LDCs has become more unstable, generating and/or expanding many different types of conflict, from crime to intra-household violence, from environmental destruction to unfair competitive practices in human relations and commerce.

Finally, the logic of globalization tends to homogenize once diverse institutions and the cultural frameworks derived from them. This brings conflict in different forms, as local culture institutions and structures have to adapt or risk dying out. This includes ADR practices themselves: their introduction in LDCs may become a source of conflict if indigenous forms of negotiation, based on local values and cultures, are not taken into account.

This list is not complete. Inequality has more faces and more links to social conflict than this paper has the room to discuss. The issues raised here -- the connections between peoples' welfare and social conflict at both local and global levels -- deserve further analysis.

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By Olympio Barbanti, Jr. 


[1] OECD, Income Distribution in OECD Countries: Evidence from the Luxembourg Income Study (Paris: OECD, 1995).

[2] P. Fajnzylber, D. Lederman and N. Loayza, "Determinants of Crime Rates in Latin America and the World," World Bank Latin America and the Caribbean Viewpoints Series Paper (Washington, D.C.: World Bank, 1998).

[3] M. Pradhan and M. Ravallion, "Demand for Public Safety," Free University and the World Bank, mimeo (Washington, D.C., World Bank, 1998).

Olympio Barbanti, Jr. is on the faculty in the Department of International Relations at the Pontificia Universidade Catolica de Minas Gerais, in Belo Horizonte, Brazil. He has 16 years of professional experience on issues relating to the promotion of community-based sustainable development in the Brazilian Amazon, and has delivered a number of capacity-building courses on conflict negotiation and consensus building for social and environmental NGOs, government officials, Public Attorney members, and trade union leaders.