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Consequences of Social Inequality:

The Effects of Relative Economic Deprivation
On Ethnic Conflict
In the Former Yugoslavia





Abstract
This paper examines the socioeconomic conditions through which ethnic conflict
is initiated and escalated. A considerable amount of debate surrounds the context of
conflict theory and what factors most likely trigger violent uprisings. Despite a vast
quantity of literature on the subject, many scholars have fallen short in developing a
holistic perspective on the relationship between social inequality and ethnic conflict. This
paper analyzes the historical links between relative economic deprivation and ethnic civil
war in the former Yugoslavia. My research suggests that inequality imposed by the state
does in fact increase the likelihood of conflict, however, its varying degrees of violence
depend on the various forms of economic disparity that exist within a given society.


Introduction
Since the end of World War II, the links between economic inequality and armed
violence have been investigated directly and indirectly through various channels of
conflict analysis. Various models such as subcultural theories, strain theory, opportunity
theories, social disorganization theory, economic theories of crime, and relative
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deprivation theory have all attempted to expand upon this relationship in order to better
understand the origins of sectarian violence.
In this paper, I develop a causal model between various forms of social inequality
that affect the likelihood of civil unrest that can possibly lead to sectarian violence. My
causal factors are income disparity, unemployment, exploitation (or relative economic
deprivation), and resource allocation. My hypothesis is that each of these variables
influence conflict, and that it is based on existing and preexisting social structures and
institutions, as well as international support.
In the case of Yugoslavia, the most economically successful republics were the
one to secede first due to stronger political leverage that allowed them to gain enough
international support in order to gain independence. This facilitated the weaker provinces
to eventually be able to secede. Without Slovenia and Croatias path towards complete
autonomy, less economically developed provinces such as Kosovo and Bosnia would
have not been able to break away from the Yugoslav federation.


Relevant Literature
There is much disagreement within the academia of Conflict Analysis regarding
what the most prevalent factors are leading to ethnic civil war. Many scholars believe that
socioeconomic inequality is the most influential element of ethnic conflict, while others
argue that it is actually much less of a factor than one would originally assume.
Dr. Tolga Sinmazdemir, a professor and post-doctoral research associate of
Political Science at Washington University in St. Louis, argues that empirical research
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ultimately suggests that there is no major discernable correlation between cross-national
measures of economic inequality and armed conflict. Some scholars with similar views
claim that poor minorities who are subjugated under oppressive regimes are less
confident and less capable in initiating a conflict or even fighting back against a dominant
group (Sinmazdemir 2012, 2).
In his 2012 paper, Economic Inequality and Ethnic Conflict, Sinmazdemir claims
that empirical evidence has showed that income disparity alone displays no significant
causal relation with the onset of violent conflict. He does however acknowledge the fact
that economic and political grievances play a significant role in determining a groups
incentives to resort to violence (Sinmazdemir 2012, 2). In order to test whether inequality
increases or decreases the chance of ethnic conflict, Sinmazdemir presents a theoretical
framework regarding minorities, income status, and incentives to resort to violence [in
democracies]. His framework:
distinguishes between minorities on the basis of their economic power and allows for
policies of income redistribution to have different effects on poor and rich minorities
attachment to democracies that do not address their ethnic grievances. Second, it allows
for the possibility that starting armed conflict in order to change democratic policy
choices may lead to defeat and punishment in the form of policies that are worse in their
economic effects on belligerent groups than the effect of democratically elected policies
(Sinmazdemir 2012, 22).

Given these two circumstances, Sinmazdemir claims while levels of redistribution
makes rebellion by poor minority groups less likely, it makes rebellion by rich minorities
more likely. His original hypothesis assumes that the effect of income inequality on an
ethnic groups perceived incentives for violence is contingent upon policies regarding
income distribution. More specifically, he argues that poorer minority communities have
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stronger incentives to resort to violence when their income is further away from the
national average only if the redistribution is low (Sinmazdemir 2012, 22). He goes on
further to suggest that rich minorities on the other hand, have stronger incentives to
choose violence over peace when their income is further from the national average and
redistribution levels are simultaneously high. However, the empirical record collected
through his own research does not support his hypothesis in the case of rich minorities.
Other conflict experts such as Patrick Kuhn and Nils Weidmann claim that
economic inequality does in fact affect the likelihood of armed conflict. In Unequal We
Fight: The Impact of Economic Inequality Within Ethnic Groups on Conflict Initiation,
Kuhn and Weidmann analyze the mobilization process by studying the effects of intra-
group economic inequality on conflict. They both contend that an ethnic groups
economic inequality is negatively related to its mobilization costs, thus increasing the
probability that the less opportune group will initiate a conflict (Kuhn & Weidmann
2013, 1).
Basic conflict theory suggests that in capitalist societies, structural contradictions
lead to the economic exploitation of workers, which in turn promotes class struggle
between workers and capitalists (Marx, 1885). According to Karl Marxs theory of class
struggle, the wider the gap of economic inequality, the more likely that the proletariat
will become socially restless. Social discontent as a result of the economic circumstances
of lower wage earners in a class-based society is referred to as immiseration. The higher
the level of immiseration, the more likely that the governing power will be violently
challenged (Marx, 1885).
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However, Karl Marxs theory also acknowledges class consciousness as a
prerequisite for revolution. In other words, the have-nots of society must collectively
recognize their exploitation in order for rebellion to occur in the form of an armed
conflict. According to Marx, by reorganizing the distribution of resources in a more
equitable manner, a state can limit the likelihood of civil conflict (Hagen, 1994).
Nonetheless, the Marxist view of social class and resource allocation is rather outdated
and lacks the consideration of political cronyism and corruption on behalf of the state.
The intention to fairly redistribute resources and capital throughout a society can
actually backfire and have a greater negative effect than one may suspect. The collapse of
Yugoslavia in the nineties is a prime example of this. Certain republics throughout the
former Yugoslavia performed better economically than others, but they were not fairly
compensated based on output. Federal money was redistributed equally throughout all of
the republics. As a result of this there was very little incentive for poorer republics to
disengage and higher incentives for the more developed ones to create social unrest
(Vaknin, 2000).
After Yugoslavia revised its constitution in 1974, President Josip Broz Tito
allowed greater regional autonomy and decision-making among the various republics of
the socialist federation. This political move helped the more prosperous republics of the
country to realize the structural imbalances of contributions versus rewards and
incentivized secession once the federal government became to weak to sustain itself. This
is exactly why the more developed Western states of the former Yugoslavia (Slovenia
and Croatia) seceded before anyone else, because they were unwilling to cough up any
more money to help Belgrade pay back its multilateral debt (Vaknin, 2000).
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Ethnic inequality in the Former Yugoslavia
The Yugoslav civil wars in the 1990s were caused by rising interethnic tensions,
economic decline, and regional inequality. The Former Yugoslavia began to experience a
severe decline in its economy (-5 percent GDP growth during this period) and the burden
was felt throughout each autonomous region. The ensuing competition for resources that
took place among ethnic groups has been the underlying source of conflict (Thomas
2003, 120). After Titos death, ethnic tensions began to escalate as nationalism and ethnic
nepotism exacerbated preexisting regional inequalities. Despotism and corruption under
Slobodan Milo!evi"s regime facilitated the growth of economic inequality between each
republic even further.
Inequality is driven by human greed and nepotism, which is evident through the
analysis of the case of Yugoslavia. During the communist era, society within each
republic was more or less economically egalitarian in terms of socioeconomic inequality.
However, economic development between each of the republics was noticeably unequal.
Throughout history and even to this day, Slovenia, Croatia, and Vojvodina (Northern
Serbia) have relatively been more economically developed than Bosnia, Kosovo,
Montenegro, and Macedonia (Source 3: Bangura; UNRISD 2005, 26). This is mainly
due to historical factors and influence structures that segmented the Balkan population
and incorporated different areas of the region into global networks of trade, while others
were in a sense strangled by authoritarian and less secular rule (Source needed).
The northwestern most reaches of the Balkan Peninsula are conveniently located
at the gates of Western Europe. Slovenia, Croatia, and Vojvodina have become more
culturally, politically, and economically assimilated with the West than their Eastern
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counterparts due to the geopolitical landscape of the region. The Ottomans occupied
Macedonia, Montenegro, and the bulk of Serbia for over five hundred years, while
Slovenia, Croatia, and Vojvodina were better equipped and more capable in defending
their eastern borders against Turkish conquest (Talbot, 2000).
Therefore, at that point in history, the western regions of Yugoslavia became
plugged into the new wave of western idealism of innovation and modernity, while the
southeast was too busy solely building up its militaristic capability in order to fight off
the Ottomans. After Yugoslavia was eventually unified, the three western provinces
would become largest and most important economic performers of the country (Talbot,
2000).
However none of that mattered by the time socialism rolled around the corner
after World War II. During socialism in Yugoslavia, the unfair distribution of capital and
resources throughout all of the republics was based on a system that lacked incentives
other than political patronage, which eventually transformed into ethnic nepotism once
Tito died. By the late eighties there were more than several apparent signs that
Yugoslavia would crumble as socialism in Europe began to whither (Talbot, 2000).
Yugoslavia began to accrue an irreversible amount of debt throughout the Tito
era, which after he died, was left over to his successors to pay off. The leaders of each
autonomous region of Yugoslavia began to clash over issues of debt and other economic
burdens such as high unemployment and growing poverty. At the wake of the 1980s,
Yugoslavia had become very politically and economically unstable with ethnic tensions
rising at the absence of a firm leader who was able to hold the multiethnic republic
together (Talbot, 2000).
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The war impoverished most parts of society, increasing preexisting economic
strife, while widening ethnic regional inequality between each republic. However,
individuals with special connections to paramilitary units and state power personally
profited from the war, which exacerbated economic disparities between the haves and
have-nots of society even further. Slobodan Milo!evi", the President at the time of the
disintegration of Yugoslavia, claimed he was defending the future of Yugoslavia by
waging war in each republic that wanted to secede. In reality his main political objective
was to transform the entire country into a Serb-dominated dictatorship (Zimmerman,
1996).
Milo!evi" and his gang of political thugs ceased control wherever possible in
order to try and maintain power over whatever was left of Yugoslavia. It was an
aggressive act of desperation that widened ethnic cleavages in the Balkans to a point of
such ethnic hatred toward one another. Soon after Slovenia was the first one to officially
secede, it led to a domino effect that eventually dismembered the republic into six
autonomous states: Slovenia, Croatia, Bosnia & Herzegovina, Macedonia, Montenegro,
and Kosovo. Radical forms of nationalism produced by the political elites of each
republic became rampant and atrocities were committed on all fronts as they attempted to
mobilize ethnic populations against each other (Zimmerman, 1996).
However, domestic struggles and militant nationalism were not the only factors
that aggravated ethnic inequality. Many other elements were simultaneously at work that
helped drive social inequality towards ethnic civil war. According to Dr. Raju Thomas,
Yugoslavia fell apart as a result of an exclusionary system of international bias towards
specific regions of the republic. He claims that Yugoslavia fell apart due to selective and
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prejudicial international recognition policy of its internal republics (Thomas 2003, 3).
He goes on further to argue that the political intrusion of Western powers was based on
cultural proximity, and that they also helped lead to the dissolution of Yugoslavia as well
(Thomas 2003, 4). This is an important supplemental factor to take into account because
international ethnic favoritism, in order to advance ones policy agendas, can also
exacerbate inequality that becomes susceptible to civil war.

i. Bosnia & Herzegovina
Bosnias civil war was perhaps the bloodiest out of all of the ethnic conflicts that
ravaged the Former Yugoslavia. The war began in 1992 shortly after Croatia had
seceded, and lasted for almost four years until it too eventually split from the federation.
The Bosnian War alone left over 200,00 people either dead or missing (Bangura;
UNRISD 2005, 26) with an estimated outflow of 800,000 refugees within a time span of
three and a half years (Valenta & Ramet, 1). In total, the entire war produced over 2.3
million refugees and internally displaced persons (IDPs) (Bangura; UNRISD 2005, 26).
Bosnia, a multiethnic republic within a greater ethnically diverse state, is often
considered a microcosm of Yugoslavia. As of 2005 there were 44% Bosniaks (Muslims),
34% Serbs, and 16% Croats living in Bosnia, however, its demographic makeup has
varied over time. The Bosniak population increased from 39.6% in 1971 to 43.7% in
1991 (before the outbreak of war); that of Serbs and Croats fell from 37.2% to 31.4%,
and 20.6% to 17.3% respectively (Bangura; UNRISD 2005, 26). Most of these victims
were forced out by combatant policies aimed at creating ethnically homogenous regions.
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Social cleavages between each ethnic group in Bosnia are less deep than they
typically are throughout most other multiethnic countries in Europe. The reasons for this
are because they all share a common language and similar customs and cultures that
collectively create the Bosnian identity. Socioeconomic disparities between the three
groups are also less sharp due to the relatively egalitarian structure of society that
socialism had created. However, in comparison to the rest of Yugoslavia, Bosnia was
much less developed and much poorer than its state counterparts. Wages in Bosnia were
16 percent lower than the Yugoslav average, which pushed many to look for
employment in other parts of the federation, as well as abroad (Bangura; UNRISD 2005,
27).
Political and ethnic nepotism throughout socialist Yugoslavia played an integral
role in shaping inequality. Ethnic nepotism becomes common in countries where people
are separated by ethnic borders with either a racial, national, linguistic, tribal, religious
or caste basis (Vanhanen 1999, 55). After Tito (who was half Croatian and half
Slovenian) died, Serbs began to dominate the communist party and administration within
Bosnia. This was largely due to the varying political roles of each of the three ethnic
groups during WWII, and policies such as land reform that affected non-Serbs, as well
as the conflict between the communist party and the Catholic Church, which most
Croatians are associated with by faith (Bangura; UNRISD 2005, 28).
In 1981, just over 44 percent of the communist party in power was Serbian, while
26.5 percent and 11.5 percent were Muslim and Croatian, respectively. Ethnic nepotism
in Bosnia was most apparent through Milo!evi"s vast control over the Yugoslav
military. By 1991, Serbs comprised of approximately 60 percent of the officer corp, and
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Croats and Muslims made up of only 12.6 and 2.4 percent, respectively (Bangura;
UNRISD 2005, 28).
Despite all of this however, Bangura mentions that postwar aid flows have tipped
the scale in the other direction. Since the war ended, foreign aid had been mostly skewed
in favor of the Croat-Bosniak entity, producing more inequalities between the Serbs, and
the Croats and Bosniaks. According to the UN, 72 percent of Serbs, 65 percent of
Bosniaks and 19.8 percent of Croats live on incomes of less than 500 KM (Bangura;
UNRISD 2005, 28).

ii. Kosovo
According to the World Bank, Kosovo is one of the poorest countries in Europe.
Just under half of the population live below the national poverty line while an estimated
17 percent live in extremely poor conditions, and the unemployment rate is currently at
47 percent (IDA, The World Bank). According to USAID, the portion of Kosovos
population who live in extreme poverty lack access to clean drinking water and are
unable to meet basic nutritional needs. Extreme poverty is disproportionately high
among children, the elderly, households with disabled members and female-headed
households (USAID, 2010). Unlike Bosnia however, Kosovo is predominantly
homogeneous with an ethnic composition of over 90 percent Albanians (CIA world
factbook).
During the medieval era, Kosovo was the cultural, political, and economic hub of
the very short-lived Serbian Empire and is still considered the historical heartland of
Serbian culture. The Serbian population drastically declined over the span of 500 years of
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Ottoman rule. During these five centuries, an influx of Turks and Albanians moved into
the region due to policies and land rights that favored Muslims. Despite the harsh
conditions that the Ottoman period produced for many non-Muslims, Serbs remained the
majority until Albanian eventually became the dominant ethnic group at the end of the
19
th
century (CIA world factbook).
Serbia regained control of Kosovo two years before the heir to the Austro-
Hungarian throne was assassinated in Sarajevo. It remained in Serbian possession until
1999, following a three-month NATO operation that eventually cornered Milo!evi" into
agreeing to pull all Serbian military and police personnel out of the region. During
communism however, Kosovo remained a part of Serbia with limited regional autonomy
under the constitution of the Socialist Federal Republic of Yugoslavia (SFRY) (CIA
world factbook).
Kosovos economy is predominantly agriculturally based with about 40 percent of
the population having to rely on subsistence farming. Plot sizes are small, and farmers
lack technical expertise and inputs (USAID, 2010). Over the years, society has remained
largely traditional, dominated by a culture of patriarchy that still lingers through the
political fabric of modern Kosovo (USAID, 2010).


Concluding Thoughts


As newly independent countries such as Bosnia and Kosovo continue on the path
towards economic recovery, one of the gravest concerns are ensuring that all people,
regardless of ethnicity, religion, sexual orientation, etc. are all treated fairly and equally
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before the eyes of the government. One of the main challenges that emerges for
policymakers there [the Balkans] is to ensure that all forthcoming initiatives designed to
exploit this growth are as inclusive as possible, capable of increasing shared prosperity
for all populations in the region (World Bank News, 2014).
The perspective of this paper, based on academic research and economic data on
regional inequality in the former Yugoslavia, suggests that relative economic deprivation
(regionally) played a significant role in initiating the ensuing civil wars and ethnic
tensions in the Balkans throughout the nineties. Social unrest was not so prevalent during
the Tito years, and nationalist aspirations grew under the radar while he managed to
somehow suppress any sort of major upheaval through sheer power of governance.
Almost ten years after Tito died, the Slovenes and Croats sought to reform Yugoslavia by
decentralizing power to each of the republics, but were unsuccessful. As a result,
Slovenian and Croatian delegations left congress and the Yugoslav communist party
began to disband.
Nationalism grew throughout the republics and Yugoslavia was too weak to hold
on to federal power over its entire territory. Once Western powers became involved in the
conflict, Milo!evi" and his Serbian counterparts were no longer capable of maintaining
control and the federation dismembered into six sovereign states. Soon after the War in
Croatia, Bosnia and Kosovo followed, and the rest of the remaining republics split fairly
peacefully.
In conclusion, ethnic nepotism, invoked by Slobodan Milo!evi" played the most
significant role in the demise of Yugoslavia. By the late eighties it was quite apparent that
Yugoslavia would not last much longer, so the communist party desperately tried to
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maintain federal control by reconquering regions of each republic with Serbian minority
populations. Belgrades attempt to obtain most of the capital and resources throughout
the country is what created such vast regional and ethnic inequality that had an enormous
influence on civil war. The economically exploited were able to mobilize efficiently
enough to challenge state power. Challenges still lie ahead for Kosovo and Bosnia, and
other separatist regions as well. Whether or not they will be able to learn from previous
despotic predecessors remains to be seen, however, if they do take the opportunity to
democratize, the chances of social unrest and conflict will be less likely.
























Work Cited
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