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Growing Into and Out of Social Conflict

  • Philipp Harms
  • Stefan Zink

We develop a model of growth and distributional conflict which demonstrates that social tensions may peak at an intermediate development stage. In fact, unless the economy is caught in an underdevelopment trap, the relationship between average wealth and the likelihood of radical redistribution tends to be hump-shaped: while the net benefits of redistribution for the poor are small at low development stages, moving towards egalitarianism considerably improves their income prospects once an intermediate level of per capita wealth is reached. As the economy grows further, the incentive to challenge the existing social order decreases again and eventually vanishes. Copyright (c) The London School of Economics and Political Science 2005.

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Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 72 (2005)
Issue (Month): 286 (05)
Pages: 267-286

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Handle: RePEc:bla:econom:v:72:y:2005:i:286:p:267-286
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  1. Alesina, Alberto F & Rodrik, Dani, 1991. "Distributive Politics and Economic Growth," CEPR Discussion Papers 565, C.E.P.R. Discussion Papers.
  2. Bénabou, Roland, 1996. "Inequality and Growth," CEPR Discussion Papers 1450, C.E.P.R. Discussion Papers.
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  7. E. Somanathan, 2002. "Can Growth Ease Class Conflict?," Economics and Politics, Wiley Blackwell, vol. 14(1), pages 65-81.
  8. Matsuyama, Kiminori, 2000. "Endogenous Inequality," Review of Economic Studies, Wiley Blackwell, vol. 67(4), pages 743-59, October.
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  10. Olson, Mancur, 1963. "Rapid Growth as a Destabilizing Force," The Journal of Economic History, Cambridge University Press, vol. 23(04), pages 529-552, December.
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