Urbanization, Ethnic Diversity, and the Risk of Violence: A Case Study of China’s Western Frontier

China launched the Marketization Reform in 1978 and the Great Western Development Campaign (Xibu da kaifa) in 2000, both of which boosted the urbanization process of Xinjiang, a remote inland region on China’s inner Asian frontier. Urbanization is expected to enhance economic and social development, thereby consolidating national security. However, past studies on the relationship between urbanization and violence have yielded mixed results. We argue that ethnic composition of a society has a significantly conditional effect on the nexus between urbanization and stability. Using a county-level dataset of ethnic violence in Xinjiang from 1997 to 2008, our analysis confirms our theoretical expectation: in ethnically homogenous areas, urbanization reduced the likelihood of violence by improving economic welfare and public goods provisions; in ethnically heterogenous areas, the distribution of welfare and public goods along ethnic lines increased inter-ethnic grievances and the risk of violence. We present micro-level evidence for our causal mechanism through an analysis of the 2005 China mini-census data, which confirms that although urbanization increased overall economic welfare, its distribution was uneven, leaving marginalized members of certain ethnic groups at a disadvantage in terms of both income and health outcomes.