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Does Inequality lead to Conflict?

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  • Indranil Dutta
  • Ajit Mishra

Abstract

This paper presents a simple model to show how distributional concerns can engender social conflict. They 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. We find that anticipated future inequality plays a crucial role in determining the level of conflict in the current period. The model also provides an explanation for why similar levels of inequality may exhibit drastically different levels of conflict. Further, they argue that the link between inequality and conflict may be non-monotonic. [Research Paper No. 2005/34]

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  • Indranil Dutta & Ajit Mishra, 2010. "Does Inequality lead to Conflict?," Working Papers id:3246, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:3246
    Note: Institutional Papers
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    1. Stefano Battilossi & Stefan O. Houpt, 2009. "Predicting institutional collapse: stock markets, political violence and the Spanish Civil War, 1920-36," Working Papers 9002, Economic History Society.
    2. Savoia, Antonio & Easaw, Joshy & McKay, Andrew, 2010. "Inequality, Democracy, and Institutions: A Critical Review of Recent Research," World Development, Elsevier, vol. 38(2), pages 142-154, February.

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    Keywords

    conflict; wealth inequality; Nash bargaining;
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