Divide and Rule: How Political Elites Polarize Society

68 Pages Posted: 18 Feb 2021 Last revised: 15 Jun 2022

See all articles by Simon Alder

Simon Alder

Swiss National Bank; University of North Carolina (UNC) at Chapel Hill

Yikai Wang

University of Essex

Date Written: June 13, 2022

Abstract

We propose a theory of endogenous polarization where a political elite strategically initiates conflicts between groups of people to polarize society and strengthen the elite's power. In the model, interactions between two groups of people result in stochastic gains, which are taxed by the elite. Outcomes of past interactions are observed and used to update the common belief about the expected gains. High expected gains from interactions correspond to low polarization and increase people's incentives to cooperate and oust the rent-extracting elite. The elite responds with a divide-and-rule strategy: initiating a conflict to interrupt the interactions and prevent the updating of beliefs. An initial increase in polarization due to the conflict can lead to a persistent high-polarization conflict trap without productive interactions. In an extension, we discuss policy interventions that could counter the polarizing strategies of the elite.

Keywords: Polarization, divide and rule, conflict, autocracy, revolution, democracy, trade interactions, learning, beliefs, trust

JEL Classification: D72, D74, D83, F15, H30, N40

Suggested Citation

Alder, Simon and Wang, Yikai, Divide and Rule: How Political Elites Polarize Society (June 13, 2022). Available at SSRN: https://ssrn.com/abstract=3769435 or http://dx.doi.org/10.2139/ssrn.3769435

Simon Alder

Swiss National Bank ( email )

Economic Affairs
Zuerich, 8022
Switzerland

University of North Carolina (UNC) at Chapel Hill ( email )

Chapel Hill, NC 27599
United States

Yikai Wang (Contact Author)

University of Essex ( email )

Wivenhoe Park
Department of Economics, University of Essex
Colchester, Essex CO4 3SQ
United Kingdom

HOME PAGE: http://yikaiwang.weebly.com

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