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Economic, social and political fragmentation: linking knowledge-biased growth, identity, populism and protectionism

Snower, D. J. and Bosworth, S. ORCID: https://orcid.org/0000-0002-8978-9516 (2020) Economic, social and political fragmentation: linking knowledge-biased growth, identity, populism and protectionism. European Journal of Political Economy. ISSN 0176-2680 (In Press)

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Abstract/Summary

This paper examines how economic fragmentation (widening inequality of skills, income and education) gives rise to social fragmentation (via incompatible social identities), generating political fragmentation (via incompatible economic policies). We consider three value-driven identities: individualism, focused on status concerns, communitarianism, focused on social affiliations, and multi-affiliatedness, encompassing both objectives. Under endogenous identity formation high-skill people are drawn to individualism, the lower-skilled to communitarianism, and those of intermediate skill to multi-affiliatedness. Skill- and education-biased growth leads to increasing social polarisation, expanding the individualistic and communitarian groups at the expense of multi-affiliates. This expands the political constituency for closed policies (such as protectionism, immigration controls and nationalism), even when these policies reduce everyone's living standards. Our analysis thereby helps explain the economic and social underpinnings of populism.

Item Type:Article
Refereed:Yes
Divisions:Faculty of Arts, Humanities and Social Science > School of Politics, Economics and International Relations > Economics
ID Code:93416
Publisher:Elsevier

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