GLOBALIZATION AND INTERNAL CONFLICT**Håvard Hegre (The World Bank)Ranveig Gissinger (Norwegian University of Science and Technology)Nils Petter Gleditsch (PRIO and NTNU)AbstractThe paper outlines and compares two models of how globalization is likely to affect the risk of civil war – a liberal model and structuralist model. Overall, we find considerably more support for the lib-eral model than for the structuralist, anti-globalist model. Trade does appear to have a capacity for in-creasing internal peace – not directly, but via trade’s beneficial effects on growth and increased politi-cal stability. Overall, we find economic openness to be associated with higher growth. Our results give no support to the idea that globalization reduces growth, not even for poor countries. We found some evidence that trade increases income inequality. However, in contrast the robust link established be-tween income inequality and violent crime, we do not find any relationship between inequality and civil war. In sum, the beneficial effect of trade and foreign investment outweighs whatever violence may be generated by increased inequality. We find that economic openness is associated with greater stability of political systems. This effect is particularly strong for democracies, but also positive for inconsistent regimes and autocracies. Finally, in our analysis of the factors increasing the likelihood of civil wars, we find no direct impact of economic openness. However, countries with a high income per capita and a stable political system have considerably lower risk of civil war than those without. Hence, since we find economic openness to increase average income and political stability, we do find an indirect conflict-reducing effect of globalization.* The paper will appear as a chapter in Gerald Schneider, Katherine Barbieri & Nils Petter Gleditsch, ed., 2002, Globalization and Conflict. Boulder, CO: Rowman & Littlefield.The theoretical part of this chapter borrows heavily from Gissinger and Gleditsch (1999). The empirical analysis is new. An earlier version was presented to the World Bank Conference on The Economics and Politics of Civil War: Launching the Case-Study Project, Soria Moria conference center, Oslo, 11–12 June 2001. We are grateful for comments from the participants of that meeting, and from Indra de Soysa, Gunnar Eskeland, Erik Gartzke, John Randa, and Erich Weede. We also ac-knowledge the assistance of Naima Mouhleb, Håvard Strand, and Lars Wilhelmsen.The findings and conclu-sions expressed in the chapter are entirely that of the authors, and do not necessarily represent the views of the World Bank.
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