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Abstract

While there is a general view that poverty and inequality can lead to conflict and are therefore in this sense security issues, the precise nature of the links is less well appreciated. Focusing on conflicts within states, this paper draws out the links based on the recent economics literature, and discusses their implications for policy. It is argued that while inequality is a natural concomitant of economic processes, particularly those driven by the market, its implications for security emerge when unequal outcomes align with socio-political cleavages. Such an alignment can turn a benign outcome, in which increasing inequality might even help economic efficiency, into one in which conflict worsens the climate for investment even before, in the extreme, a collapse of the social order. A careful assessment of the intersection between economic outcomes and social divisions is necessary in designing policies and interventions for growth and poverty reduction.

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