Relative deprivation and civil conflict in Nepal

This paper investigates the relationship between relative deprivation and the escalation of the civil conflict in Nepal. Poverty in Nepal decreased substantially between 1995 and 2003, which seems puzzling given the political instability and the raise and strengthening of the insurgency. We hypothesize that increasing differences in welfare among different groups - i.e., relative deprivation as opposed to absolute deprivation - can help explain this puzzle. The hypothesis is tested with data from 2 national-representative household surveys, matched with information regarding mass abductions by the Maoists, obtained from an extensive search of newspaper articles. The identification strategy relies on the fact that the months following finalization of the second round of data collection were characterized by a geographical escalation of the conflict. The paper shows that households with relatively large land holdings have gained disproportionately from recent growth, resulting in relative deprivation of the (near) landless. Land ownership is used as a proxy for socio-economic status, to reflect the importance that is attributed to land in Nepali society. The paper then shows that recruiting by Maoists through mass abduction of young people is more important in districts where inequality has increased. We find, in particular, that the expansion of Maoist recruitment activities beyond their initial heartlands occurred in districts where the relative deprivation of the (near) landless, had increased significantly in the preceding period