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Polarization under rising inequality and economic decline

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  • Alexander J. Stewart
  • Nolan McCarty
  • Joanna J. Bryson

Abstract

Social and political polarization is a significant source of conflict and poor governance in many societies. Thus, understanding its causes has become a priority of scholars across many disciplines. Here we demonstrate that shifts in socialization strategies analogous to political polarization and identity politics can arise as a locally-beneficial response to both rising wealth inequality and economic decline. Adopting a perspective of cultural evolution, we develop a framework to study the emergence of polarization under shifting economic environments. In many contexts, interacting with diverse out-groups confers benefits from innovation and exploration greater than those that arise from interacting exclusively with a homogeneous in-group. However, when the economic environment favors risk-aversion, a strategy of seeking low-risk interactions can be important to maintaining individual solvency. To capture this dynamic, we assume that in-group interactions have a lower expected outcome, but a more certain one. Thus in-group interactions are less risky than out-group interactions. Our model shows that under conditions of economic decline or increasing wealth inequality, some members of the population benefit from adopting a risk-averse, in-group favoring strategy. Moreover, we show that such in-group polarization can spread rapidly to the whole population and persist even when the conditions that produced it have reversed. Finally we offer empirical support for the role of income inequality as a driver of affective polarization in the United States, mirroring findings on a panel of developed democracies. Our work provides a framework for studying how disparate forces interplay, via cultural evolution, to shape patterns of identity, and unifies what are often seen as conflicting explanations for political polarization: identity threat versus economic anxiety.

Suggested Citation

  • Alexander J. Stewart & Nolan McCarty & Joanna J. Bryson, 2018. "Polarization under rising inequality and economic decline," Papers 1807.11477, arXiv.org, revised Apr 2020.
  • Handle: RePEc:arx:papers:1807.11477
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    References listed on IDEAS

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    Cited by:

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    2. Eugen Dimant, 2020. "Hate Trumps Love: The Impact of Political Polarization on Social Preferences," ECONtribute Discussion Papers Series 029, University of Bonn and University of Cologne, Germany.
    3. Alexander J. Stewart & Nichola Raihani, 2022. "Group reciprocity and the evolution of stereotyping," Papers 2205.12652, arXiv.org.
    4. Tuki, Daniel, 2023. "Violent conflict and hostility towards ethno-religious outgroups in Nigeria," SocArXiv 2er9a, Center for Open Science.
    5. Tuki, Daniel, 2023. "Violent conflict and hostility towards ethno-religious outgroups in Nigeria (Version 2)," SocArXiv 7mfek, Center for Open Science.
    6. Edward L. Knudsen, 2023. "Stable or stagnant? Political economy and governance in the United Kingdom, France, Italy and Germany since 2000," Global Policy, London School of Economics and Political Science, vol. 14(S4), pages 90-103, October.
    7. Alexander J. Stewart & Joshua B. Plotkin & Nolan McCarty, 2021. "Inequality, Identity, and Partisanship: How redistribution can stem the tide of mass polarization," Papers 2103.14619, arXiv.org.
    8. Munteanu Paula & Enache Andreea-Oana & Vasile Razvan, 2022. "Are foreign direct investments a robust factor for sustainable development?," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 16(1), pages 1027-1037, August.

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