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This paper asks how can economic development in Global South nations can be better managed so as to reduce the potential for violent ethnic conflict To answer this we must pose a prior question why is economic development so often accompanied by violent ethnic conflict Viewing economic development and ethnic conflict as linked problems requires reassessment of two widely accepted schools of thought about the relationship between these phenomena One school prevalent in the 1950s and 1960s held that economic development would inevitably reduce the potential for violent conflict since growth would be rapid and the resulting benefits diffused through all levels of society Proponents included both mainstream and Marxist development scholars 3 The first decade or so of post colonial independence seemed to confirm this theory but in the late 1960s rising ethnic tensions in many new nations and full-blown ethnic civil wars in some raised doubts A second and more persistent school held that economic development policies and those relevant to maintaining political stability could be formulated in separate compartments World Bank staff members were major proponents Their views reflected graduate training in economics plus a charter specifying governments as the Banks clients and proscribing political involvement It was not until the 1980s that senior Bank officials began to take an increased interest in public administration -- an area they attempted to de-politicize by labeling it governance 4 Political changes from the late 1960s through the mid-1990s proved both views wrong Even in developing nations that did well economically economic benefits did not diffuse to all segments of society or all regions This lead some ethnically diverse states such as Indonesia Malaysia and Sri Lanka to implement preferential policies that benefited some groups or regions disproportionately Disagreements over the fruits of development made the accommodations necessary to sustain political order more difficult and contributed to outbreaks of violent conflict Increasingly policy-makers are acknowledging that economic development and
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