Political Economy

Saumitra Jha: Is There an Economic Solution to Ethnic Violence?

A political economist explores how commerce can help promote peace.

February 28, 2014

| by Eilene Zimmerman


Indian school children during a henna competition to mark World Population Day, 2014 (Reuters photo by Amit Dave)

In 2006, Saumitra Jha traveled to Surat in the Indian state of Gujarat to learn why the medieval port city, like many in the region, were dubbed “oases of peace” during the violent riots in 2002 by Hindus against the minority Muslim population.

Jha, an associate professor at Stanford Graduate School of Business, knew that research into the roots of violence in communities, especially in the developing world, has shown that ethnic and religious diversity combined with poverty is often a recipe for disaster.

Still, Surat, and other medieval port cities in India, had long histories of ethnic peace even while much of their country was steeped in ethnic violence. What he discovered was an overlooked path to peace: commerce. Jha’s inquiry into the past found that when ethnicities provide complementary services and goods — each giving the other something it needs — their cities are more peaceful.

In a new paper, Jha took a close look at Hindu-Muslim interaction in South Asia, a region that is home to more than one-fifth of the world’s population and close to half of its poor. The Muslim population there — although a minority — is still the second largest in the world. “In South Asia, Hindus and Muslims have interacted for at least 1,500 years, and for much of that time there’s been some kind of conflict both within and between them. But there’s also been a lot of peace,” says Jha.

To conduct the study, he examined the level of violence in medieval port cities, which tended to be more ethnically mixed than other towns, but which also tended to have complementary kinds of commerce. He found that port towns were five times less prone to Hindu-Muslim riots between 1850 and 1950, and half as prone between 1950 and 1995. And in Gujarat, the port cities were 25 percent less likely than similar towns to experience ethnic rioting in 2002.

I wanted to understand under what conditions a city could have these long periods of tolerance and under which conditions places were more prone to violence.
Saumitra Jha, associate professor of political economy

“I wanted to understand under what conditions a city could have these long periods of tolerance and under which conditions places were more prone to violence,” says Jha. “In towns that had this historic economic complementarity, you tended to have much less violence.”

Jha found that when members of a minority group, or a group that wasn’t native to the area, provided services or goods that couldn’t be duplicated, there appeared to be more peaceful coexistence among groups. In his paper, Jha points to 17th-century Muslims, who had something Hindus wanted: well-worn, transoceanic trade routes. Those routes grew out of religious pilgrimages like the Hajj, an annual Islamic pilgrimage to Mecca in Saudi Arabia, made by millions of Muslims worldwide. In fact, the world’s largest textile market was located in Mecca from the 700s through the 1800s during the Hajj. Oceanic trade networks were nearly impossible to steal or replicate, and because of that, in port towns — where there was direct access to the Indian Ocean — Muslim advantages in Middle Eastern trade became important and there was less violence against them.

Ethnic groups also created institutions to support medieval trade and to give back to the community. One example is the Bohras, a group that converted to Islam from Hinduism in the 11th century. Although the Bohras lived in an area mostly occupied by Hindus, they traveled the pilgrimage routes to other cities and had the ability to trade, which was very valuable to the Hindus. Jha says the Bohras also had a very coordinated organizational structure. “In medieval times, that meant a clerical hierarchy. Their leaders also determined the kinds of jobs Bohras would take, promoted religious tolerance, and coordinated disaster relief, which helped the greater community.” That’s likely why Hindu and Muslim traders peacefully coexisted then — and still do now — in the Indian Ocean region, where many other commercially oriented ethnic minorities, which often lack these philanthropic organizations, have not.

The research shows that any city or town — whether at a port or not — is more likely to enjoy inter-ethnic tolerance as long as the ethnic groups are part of an economy in which their business activities complement and support one another.

Jha also found that well-coordinated institutions and organizations can pay particular dividends in countering politically motivated ethnic violence. “Particularly in close elections, there are often incentives for politicians to play the ‘ethnic card,’ using violence against minorities to mobilize their base,” he says. “But my research shows that organizations that emerged from historic interethnic trade are often particularly effective at reducing violence when these political incentives are greatest.”

Saumitra Jha is an associate professor of political economy at Stanford GSB.

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