Abstract:

In this dissertation I explore ways to integrate insights from other social sciences into economics and political economy.

In the first chapter I develop a general framework for incorporating the concept of social identity into economic theory, based on robust empirical results obtained primarily by social psychologists. I first offer a definition of social identity in terms of preferences: an individual is said to identify with a group if she cares about the relative status of that group and wants to resemble its other members. Next, I provide a general description of the process of identification. People are more likely to identify with a group the higher the similarity they perceive between themselves and other group members and the higher the status of that group. Finally, I propose an equilibrium concept where both identities and behavior are endogenously determined. The framework captures major aspects of such phenomena as ingroup bias, cooperation and conformity.

In the second chapter I apply the social identity framework to the political economy of income redistribution, focusing on class and national identities. I then present new empirical evidence that supports the main implications of the model, namely that national identification is more likely among the poor than among the rich; that national identification reduces support for redistribution; and that across democracies there is a strong negative relationship between the prevalence of national identification and the level of redistribution. The model points to national threats and to diversity within the lower class as factors that may reduce redistribution, and suggests the possibility that rising inequality may lead to less demand for redistribution.

In the third chapter I examine whether sociological accounts of the relation between poverty and authoritarianism can help explain the empirical relationship between national income and the risk of civil wars. I show that this cross-country relationship can be partly attributed to popular militarism, and that militarism is in turn robustly related at the individual level to income in a diverse set of countries. Further, I find that much of this relationship can be traced to educational attainment.