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Inequality: from identity politics to policy polarization

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  • Leonardo Cherici

Abstract

This paper studies the relationship between economic inequality and political polarization in an electoral context where voters (poor or rich and cosmopolitan or nationalist) have preferences over a redistributive and a migration policy. Building on Besley and Persson (2021), I pro- pose a different version of their theoretical model where the two parties that compete to win the election do not have symmetric strategies and loyal voters of traditional left and right wing movements place different salience on migration. I then study how an increase in economic inequality can affect the electoral competition: inequality leads both parties to please more nationalist voters, however the polarization between the two increases. The results reflect the outcomes of recent elections in western democracies.

Suggested Citation

  • Leonardo Cherici, 2025. "Inequality: from identity politics to policy polarization," DISEIS - Quaderni del Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo dis2501, Università Cattolica del Sacro Cuore, Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo (DISEIS).
    • Handle: RePEc:dis:wpaper:dis2501
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    References listed on IDEAS

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    1. Edward L. Glaeser & Giacomo A. M. Ponzetto & Jesse M. Shapiro, 2005. "Strategic Extremism: Why Republicans and Democrats Divide on Religious Values," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(4), pages 1283-1330.
    2. Amory Gethin & Clara Martínez-Toledano & Thomas Piketty, 2022. "Brahmin Left Versus Merchant Right: Changing Political Cleavages in 21 Western Democracies, 1948–2020," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(1), pages 1-48.
    3. Ilyana Kuziemko & Ebonya Washington, 2018. "Why Did the Democrats Lose the South? Bringing New Data to an Old Debate," American Economic Review, American Economic Association, vol. 108(10), pages 2830-2867, October.
    4. Giampaolo Bonomi & Nicola Gennaioli & Guido Tabellini, 2021. "Identity, Beliefs, and Political Conflict," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(4), pages 2371-2411.
    5. Gunderson, Jacob R., 2022. "When Does Income Inequality Cause Polarization?," British Journal of Political Science, Cambridge University Press, vol. 52(3), pages 1315-1332, July.
    6. Hargreaves Heap, Shaun P. & Manifold, Emma & Matakos, Konstantinos & Xefteris, Dimitrios, 2022. "How does group identification affect redistribution in representative democracies? An Experiment," Journal of Public Economics, Elsevier, vol. 215(C).
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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