 It's very nice to be back in wider, where I, 16 years ago, started working on the topic of the economics of civil wars and conflict, or however broadly one might like to put it. I want to highlight the aspect of inequality in my talk, but I will talk about other things as well, but I think our chair did a very good job in summarizing some of the points earlier on and the two sort of dark, and not so dark views of the world. And I think it's worth mentioning that there are two sets of people who are interested in conflict. So they are the development people, and they may be development economists, academic development economists, but the development community in, say, organizations like the World Bank or the United Nations family. But there's also the security, strategic studies community who became slightly, who had to reinvent themselves, if you like, after the end of the Cold War, and they are interested in other aspects of complex humanitarian crises, refugee influxes, military interventions and so on. Now, it's just worthwhile reminding us that this has led to two broad sets of policy implications and policy advice. One is to do with state building, whatever that is, and we've heard quite a bit about it from the chair and the talk, and the other, of course, is poverty alleviation, which means growth and development. So we've got to touch on both aspects. And this has got a long history, I mean, it's mentioned in Aristotle's politics. So if he talks about the conflictive nature of Athenian society, he mentions avariciousness, inequality and the incompetence of the state, and they have their resonance in modern conflict causation theory in terms of the greed, grievance and weak state capacity. And I would, like the chair, separate the weak state capacity and greed argument somewhat. Okay, so the greed argument was something which held sway when I first started working on this topic in the beginning of the millennia, around about the year 2000. And it was a motivation like the motivation behind banditry. Why not? You know, I mean, there are people on the left who have also viewed the state like Charles Stilley as a bandit as well. And of course, this led to a lot of criticism in terms of the statistical soundness of the work, and definitely it wasn't very sound, and then it was nuanced to include poverty. In other words, banditry or motivations akin to banditry work better where poverty is endemic, simply because people, mainly young men, have no alternative livelihood strategies in there. So blah, blah, blah. That went on. We all, you know, if you work in this area, you can take it for granted. We know this kind of talk. It's so boring, old-fashioned, and well-trodden that it doesn't really deserve mentioning again, except in an intro class. Then we have the weak state capacity people. And this is about the state's capacity. And this is quite interesting in many ways because the state can either or, but actually in practice do both, coerce and cajole. And for this, it requires resources. And traditionally from the left, sociologists like Charles Stilley have talked about war and the development of the state's fiscal capacity, you know, its ability to garner resources which are not just channeled to warfare, usually with an external enemy or an external target, but also perform other functions like education, public health, and so on. And gradually this leads to the development of the modern European state. But in some empirical work, me and some other co-authors have found out that civil war in recent times does retard state capacity. So it's just the other way around for the moment. And, you know, the answer is pretty obvious, but it still needs to be demonstrated and we have done that. Now, going back to the inequality or grievance argument, why was this traditionally neglected? And it's not neglected anymore, at least in the political science community. And the reason, of course, is that, there are two reasons for that. One's empirical. It's hard to get data about inequality between groups, you know, between distinct ethnic groups based upon, you know, caste, tribe, religion, and so on. Secondly, there's also a theoretical objection which was not raised by Paul Collier and associates, but is there in the work of Charles Stilley when he critiqued Ted Robert Gore. And that is grievances are infinite. They're omnipresent. Why do some grievances turn into rebellion and others do not? For which, Tilley suggested mobilization theory. Okay, so that was perhaps, that would be a strong argument for distancing yourself from the grievance argument. However, that doesn't take us away from the salience of inequality. Now, here one has to look at the sort of the other talks which are going on about inequality, which we are missing because we're here, but I suspect they would say a number of things. You know, amongst us bad guys, the economists, there's a view of inequality which is like a view akin to the medical view of cholesterol. In other words, there's good cholesterol and there's bad cholesterol. Naturally, there has to be some degree of inequality. Otherwise, you can't reward effort. However, there is bad inequality as well. And the bad inequality emanates essentially from two types of sources. One which we might call durable or categorical inequality following Charles Tilley. This is where, you know, a group is discriminated against, such as non-whites in the old South Africa. You know, lower caste people in India, for example. They are discriminated against even when they are able. And then there's the inequality of opportunity argument, which is some people, because of their disadvantaged socio-economic background, do not get the same life chances. So measured inequality in any dimension. I mean, we're missing a session on inequality in wealth. But let's say we have a lot of measured inequality in a metric called the Gini coefficient on income. So we have lots of data on income inequality. That will include, ladies and gentlemen, a component due to the different individual households' luck. So that's totally random. It will include things like their effort. There's also another aspect which is called prudence. Some households, some individuals are more prudent and therefore are likely to do better in life. But there's also the categorical inequality component and the inequality of opportunity component. So in other words, measured inequality is composed of good and bad inequality. And our job and our challenge is to decompose these. And some efforts have been made in this regard. However, efforts in separating out categorical inequality, which is slightly different from inequality of opportunity. This is the inequality which emanates because a group is a discriminated group. There needs to be more work on that. There has been work on separating inequality of opportunity and other forms of inequality, decomposing that from a Gini coefficient if you like in countries like Brazil. However, more work needs to be done on categorical inequalities. So that's what I wanted to say. And the other thing I want to say is that, of course, bad inequalities are very, very, or these durable inequalities are very, very hard to shift. And even when you shifted them, you can actually reverse the process that we are seeing in developed OECD countries at the moment due to the inequality of opportunity arising out of inequality of wealth and income. So there's another parallel development in economics, which is of importance over here. There's not been mentioned by Patricia or anyone else which is worth mentioning right now. Which are the developments in the economics of identity, which is part of something called behavioral economics. The behavioral economics is based, you know, its methodology uses experiments and it uses to look at how people behave rather than, you know, look at consequences and work backwards. But it basically starts from the following premise that, you know, preferences traditionally in economics were taken as exogenous. They were sort of taken as given. You know, I like cake or I like, you know, to go to conferences at wider. I like stuff like that. So they're treated as kind of externally given, not because they are externally given, but economic science of the economics discipline was supposed to take them as given. Behavioral economics moves away from that and says, well, you know, people's preferences are a result of a lot of historical processes and their social and psychological interactions with one another. And one of the sort of strong axioms which develop from that is that people like fairness, equal division, half-half, 50-50, sharing the restaurant bill when you go out to dinner, things like that. And they dislike ultimately, okay? They dislike, you know, a dictator telling them what to do and even if it benefits them, okay? So given that we have the economics of identity, which is essentially an individual, it goes from the individual to the group. Why an individual chooses group norms? That's partially because they identify with a group and then there are members of the group who will bring them back to the fold as it were. So if, you know, a woman in a Muslim community stops wearing a hijab, other women will sort of induce her back to wearing the hijab. That's that sort of idea. And those are important in understanding conflict. It means that individuals can choose to participate in conflict even if they're not poor themselves because they've chosen to espouse the cause of a poor group even if they're not individually poor, okay? So then there are other theories of relative deprivation which relate to individuals. Not very important over here, but they are important in other ways. And there's this notion Francis Stewart's notion of horizontal inequality which is applicable here and that is the equality between groups. But the way we would like to apply it is that the individual chooses group inequality to be something she or he identifies with and then chooses to espouse the cause irrespective of their individual circumstances which would be more highlighted by relative deprivation theory, okay? What does that mean? It essentially means that countries which do well in terms of growth can also do badly in terms of conflict. One reason for that is that although we've really not realized it, we are living in a world where the growth, the economic growth even where countries are growing is accompanied by huge increases in inequality. And this has two effects. One is that effect which is in the richer countries is that it's going to eventually lead to inequality of opportunity as the disadvantaged do not have equal life chances. They're going to get poorer in the distant future in the next generation. The other is that in some countries poverty reduction will not take place or be extremely weak, okay? So there was this idea when I was in my late 30s that growth takes place, inequality increases but poverty falls because all boards are raised. I'm a little bit suspicious about where we are going at the moment, okay? And these can be conflict-producing even in countries which are growing fast. And this results in sort of pockets of resistance, pockets of mass movements and ethnic conflicts or insurgencies in some areas. Take for example, the Maoist Belt in India, despite India's moderately good growth showing in the recent past. And of course there's the phenomenon of mass protest which is driven partially by technology, the technology of communication. But I would like to emphasize the fact that even countries which are not failed states in terms of weak state capacity where greed in terms of the Collier's view is well managed still have problems in terms because of the inequality dimension. So that dimension needs to be explored further. And as the chair said that the inequality dimension between groups has last sentence, has both an economic dimension, income, wealth, health and education, as well as a political dimension. And in empirical work because of the short limitations of the empirical work, when you compare the economic dimension and the political dimension, at present it appears, falsely perhaps because of the limitations of the work, that the political dimension, the political inequality, political group inequality dimension is even more salient, more important than the economic dimension. However, that's just because of the limitations of the analysis so far. Thank you for your indulgence. It's great to be back in Helsinki. It's sort of cold, dark place which I love.