New directions in conflict research from an economics perspective - Conflicts Over Natural Resources in the Global South - page 47

priorities. Related to this is the theory of club goods. As the name suggests, club goods
are excludable and voluntary. Only members can benefit from the club good. As with
a public good, members of a club share, so the rule for the optimal provision for pub-
lic goods also applies. The important point here is that many government services are
closer to the characteristics of club goods as opposed to pure public goods, particularly
at the local level. Furthermore, an outcome closer to the club goods optimum may be
achieved with greater local control over public expenditure. Since this implies volition,
it may be conflict reducing.
Poorly conceived fiscal federalism or the failure to adapt federalist rules to new
and emerging situations (such as natural resource discoveries or debt burdens) can
exacerbate latent conflictual tendencies in federations. In countries where minorities
are geographically dispersed, other forms of functional federalism or power dividing
mechanisms are necessary in addition to fiscal federalism. Fiscal decentralisation might
work better in middle income countries with greater revenues to spend on public goods,
and in countries where resource rich regions demand financial autonomy. Indeed,
Tranchant (2008) empirically demonstrates that fiscal federalism is more successful
at reducing conflict risk in countries with superior institutions using the international
country risk guide (ICRG) data, implying that better institutional quality means the
country has superior governance and more durable political institutions. In particular,
nations with malfunctioning institutions often have weak central governments, which
encourages violent challenges to it, as well as scenarios in which fiscal decentralisation
fails to mollify potential rebels.
3.5 SECTARIAN AND CIVILISATIONAL CONFLICT
Rational choice approaches to conflict mainly focus on the material (economic, polit-
ical) basis for conflict, as well as its material effects on society. There is relatively
less on intrinsic and identity-based motivations for conflict - a group cause based on
identity that individuals identify with and can fight for. One reason for this is that
rational choice approaches often ignore history, concentrating on more immediate cir-
cumstances. Secondly, there is relatively less literature originating from the economics
discipline on two forms of low intensity violence: civilisational or cultural conflict and
sectarian violence. This is perhaps because neither truly undermines the existence of the
state. In sectarian conflict the focus should be on individual choices to join or refrain
from violence, rather than collective or group choices, as these modes of sectarian
conflict are relatively less pre-meditated.
Sectarian violence between religious groups characterises several developing coun-
tries: Hindu-Muslim violence in India, and Christian-Muslim violence in Indonesia
and Nigeria. These outbreaks are highly localised - confined to certain regions of large
countries - and do not fundamentally undermine the state. The state itself is not a tar-
get of the violence, unlike in the case of civil war; only localised state functionaries are
found to be actors in this form of violence. India has a longer history than either Nige-
ria or Indonesia in this regard. Brass (2003) points out that Hindu-Muslim sectarian
violence, known as communal rioting in India, is not as spontaneous as we are led to
believe, but is very much a part of the political process in India - particularly during the
rise of Hindu fundamental parties in the post-Nehru era. He also contends that, since