Common political economy models point to rationalist motives for engaging in conflict but say little about how income shocks translate into collective violence in some cases but not in others. Grievance models, in contrast, focus on structural origins of shared frustration but offer less insight into when the deprived decide to challenge the status quo. Addressing these lacunae, we develop a theoretical model of civil conflict that predicts income loss to trigger violent mobilization primarily when the shock can be linked to pre-existing collective grievances. The conditional argument is supported by results of a comprehensive global statistical analysis of conflict involvement among ethnic groups. Consistent with theory, we find that this relationship is most powerful among recently downgraded groups, especially in the context of agricultural dependence and low local level of development, whereas political downgrading in the absence of adverse economic changes exerts less influence on ethnic conflict risk.
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