Growing into and out of Social Conflict

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Growing into and out of Social Conflict

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Philipp Harms () (University of Konstanz, Studienzentrum Gerzensee)
Stefan Zink () (University of Konstanz)

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Philipp Harms

Abstract

We present a model of growth and distributional conflict that implies a non-monotonic relationship between average wealth and the likelihood of radical redistribution; while the net benefits of redistribution for members of the poor class are small at low stages of development, a shift towards egalitarianism considerably improves agents' income prospects once an intermediate level of per-capita wealth is reached. As the economy grows further, the incentive to challange the existing social order decreases again and eventually vanishes. This nonmonotonicity captures the observation that historical shifts to radically redistributive policies frequently took place after extended periods of economic growth.

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Paper provided by Swiss National Bank, Study Center Gerzensee in its series Working Papers with number 02.06.

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Length: 35 pages
Date of creation: Dec 2002
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Handle: RePEc:szg:worpap:0206

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Article
- Philipp Harms & Stefan Zink, 2005. "Growing Into and Out of Social Conflict," Economica, London School of Economics and Political Science, vol. 72(286), pages 267-286, 05. [Downloadable!] (restricted)

This paper has been announced in the following NEP Reports:

NEP-ALL-2003-01-19 (All new papers)
NEP-CDM-2003-01-19 (Collective Decision-Making)

Cited by:
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Achim Kemmerling, 2003. "Regional Input on the Social Dimension of Ezoneplus: Belgium, The Netherlands, France, Austria, and Germany," Eastward Enlargement of the Euro-zone Working Papers wp13c, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Mar 2003. [Downloadable!]

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