Laissez Fear: Assessing the Impact of Government Involvement in the Economy on Ethnic Violence



This article is corrected by:

  1. Errata: Erratum Volume 52, Issue 3, 689, Article first published online: 7 August 2008

  • Authors' note: A previous version of this article was presented at the 2005 Annual Meetings of the Midwest Political Science Association, 7-10 April 2005, Chicago, IL. Much of the research was funded by a grant from Canada's Social Sciences and Humanities Research Council as well some funding from the Canada Research Chairs program. We are grateful for the research assistance provided by Amy Cox and Suranjan Weeraratne, as well as the help provided by Amy Pate when she was the coordination of the Minorities at Risk project. This article benefited from comments from Vesna Danilovic, Erin Kimball, Lee Seymour, Will Reno, the editor and three anonymous reviewers at ISQ. We also thank Scan Gailmard and Jason Seawright for their helpful methodological advice. All remaining difficulties are our own. Data and other replication materials are available at Saidman's website: and through the Dataverse Network Project (


Does government involvement in the economy promote ethnic peace, or does it contribute to ethnic violence? Two theories, grievances and opportunity, suggest that government involvement in the economy reduces ethnic violence. We present an alternative security-based logic that focuses on the role of economic rents in political competition. Our theory of insecurity predicts that free market economies reduce violent ethnic conflict by reducing fear and insecurity. We present statistical analyses, using data from the Minorities at Risk project and the Index of Economic Freedom, showing that government involvement in the economy increases ethnic rebellion. Our results suggest that the overall size of the public sector is less important than government interference with the market allocation mechanism. We conclude by discussing the policy implications of our findings.