Developing Conflict: Elite Bias in the the Stakeholder Networks of World Bank Projects

Abstract

World Bank development projects seek to increase the economic prosperity of communities and nations, as well as reduce conflict and promote peace. Yet, the selection, funding, design and governance of these projects is influenced by national governments who may favor certain identity groups over others. As a result, the economic benefits and costs of these projects may not be distributed equitably across stakeholder groups, which may aggravate, instead of moderate, conflict risk. Building on research that examines how elite bias in stakeholder networks (i.e., the favoring of elites at the expense of peripheral stakeholders) can exacerbate conflict, as well as past research that argues development aid can worsen conflict, we examine the impact elite bias in the stakeholder network of World Bank funded projects on conflict between stakeholders. Using a panel dataset of 763 World Bank funded projects across 124 countries and the media corpus of the Global Database of Environment Language and Tone (GDELT) from these countries, we measure conflict and elite bias in the stakeholder network of intergovernmental organizations at a micro-spatial level and analyze how the relationship between these constructs varies in the presence or absence of a World Bank funded project. We further explore the impact of the national composition of project contractors and the importance of state fragility. Our findings provide support for the argument that the World Bank and other financiers of development projects should take the distribution of benefits and costs across identity groups into account in their selection of projects.