Aspirations, Inequality and Social Conflict

This research project studies social conflict and economic inequality. Economic inequality often leads to social conflicts which in turn is destructive of the economy. The relationship between economic inequality and social conflict is complex; social conflict does not always rise with inequality. While economic inequality increases the gain from conflict, it also increases the cost of such conflict. It is not clear why inequality leads to social conflict and economic destruction on one context and not another. This research project combines insights from economics, psychology, and other social sciences to develop a theory to explain the relationship between economic inequality and social conflict. Several social and political conflicts (phenomena) can be explained with this model. Understanding the forms social conflict can take is of importance to academics as well as policy makers who may craft better policies to mitigate the effects of such inequalities. By providing a robust explanation of the sources of social conflicts and how to reduce them, this research project will provide inputs into policies to reduce social conflicts and hence increase economic growth and prosperity.

This research project extends the theory of socially dependent aspirations to the study of economic inequality and social conflict. Social surroundings affect individual's preferences through the setting of individual aspirations as the threshold between achievement and failure. Individual's growth can be enhanced by achieving their aspirations but may also be frustrated if the aspirations are not achievable. Because aspirations are generated by social surroundings, this leads to the interplay between the distributional character of economic development and individual behavior. With relatively moderate inequality, aspirations are achievable, and resources are expended to achieve them; when inequality is high agents give up on achieving their economic aspirations and turn to other components of their aspirations vector. The theoretical model can explain why direct class conflict is a relatively rare phenomenon. This research will apply this concept to the study of contemporary social conflicts and other phenomena, such as racism and xenophobia. The results of this research project will provide a better understanding of the sources of social conflicts and provide inputs into policies to reduce them.