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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)

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.

Suggested Citation

  • Philipp Harms & Stefan Zink, 2002. "Growing into and out of Social Conflict," Working Papers 02.06, Swiss National Bank, Study Center Gerzensee.
  • Handle: RePEc:szg:worpap:0206
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    References listed on IDEAS

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    1. 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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    4. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
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    6. Daron Acemoglu & James A. Robinson, 2000. "Why Did the West Extend the Franchise? Democracy, Inequality, and Growth in Historical Perspective," The Quarterly Journal of Economics, Oxford University Press, vol. 115(4), pages 1167-1199.
    7. Maoz, Yishay D & Moav, Omer, 1999. "Intergenerational Mobility and the Process of Development," Economic Journal, Royal Economic Society, vol. 109(458), pages 677-697, October.
    8. Roland Bénabou, 1996. "Inequality and Growth," NBER Chapters,in: NBER Macroeconomics Annual 1996, Volume 11, pages 11-92 National Bureau of Economic Research, Inc.
    9. E. Somanathan, 2002. "Can Growth Ease Class Conflict?," Economics and Politics, Wiley Blackwell, vol. 14(1), pages 65-81.
    10. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Oxford University Press, vol. 60(1), pages 35-52.
    11. Grossman, Herschel I., 1995. "Robin hood and the redistribution of property income," European Journal of Political Economy, Elsevier, vol. 11(3), pages 399-410, September.
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    13. repec:cup:apsrev:v:82:y:1988:i:02:p:491-509_08 is not listed on IDEAS
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    Cited by:

    1. 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.

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