Does higher inequality lead to conflict?

Indranil Dutta, Ajit Mishra

    Research output: Working paperDiscussion paper

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    Abstract

    In this paper we present a simple model to show how distributional concerns can engender social conflict. We have a two period model, where the cost of conflict is endogenous in the sense that parties involved have full control over how much conflict they can create. Unlike the standard results our model shows that it is not current inequality that is important for conflict,rather it is the anticipated future inequality that plays a crucial role. The anticipated inequality, however, has to be significant to result in conflict. Also, as a result of the conflict, total output and growth in the economy is lowered. Finally, in line with empirical evidence, our model also shows that richer societies will have less conflict.
    Original languageEnglish
    PublisherUniversity of Dundee
    Publication statusPublished - 2003

    Publication series

    NameDundee Discussion Papers in Economics
    PublisherUniversity of Dundee
    No.141
    ISSN (Print)1473-236X

    Keywords

    • Conflict
    • Wealth inequality
    • Nash bargaining

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  • Cite this

    Dutta, I., & Mishra, A. (2003). Does higher inequality lead to conflict? (Dundee Discussion Papers in Economics; No. 141). University of Dundee.