Political Institutions and Ethnic-Economic Conflicts

Democracy is one of the important issues in today's world. Democracy is a form of government in which the supreme power is vested in the people and exercised directly by them or by their elected (Lijphart, 1999). The term institution is commonly applied to customs and behavior patterns that are important to a society, as well as to particular formal organizations of government and public service. According to North (1990) an institution is a draft that names of the actors, their respective behavioral strategies, the cycle in which the actors choose from them, the information they possess when they make their selections, and the outcome resulting from the combination of actor choices. North (1990) emphasises another important feature as the institutional structure. Institutions have to be developed in political, economic and social life to solve those problems. Political institutions are created to solve collective action problems (Moe, 1990). They result from not only cooperation also competition between rational political actors. According to Lijphart (1999), that consensus democracies have an equal or slightly better record than majoritarian democracies in economic management and in the control of violence. Ethnic conflicts are one of the most important examples of social conflicts. Although there are disagreements when it comes to more specific political institutions as discussed above, Easterly (2001) argues that in general institutions that give legal protection to minorities, guarantee freedom from expropriation, grant freedom from repudiation of contracts, and facilitate cooperation for public services would constrain the amount of damage that one ethnic group could do to another (p.690). Corruption tends to arise when governments interventionism increase in attempting to tackle with market failures instead of promoting private alternatives. Economic problems are also important for our topic. For states, to make economy run properly requires well regulated markets with a limited government interventionism under the assurances of self-restrained political institutions. According to Huntington (1968), primary differences between developed and developing countries depend on the level of political institutions. More specifically, short of political institutions are indicated in developing countries compare to developed countries.