Working Paper: CEPR ID: DP18055
Authors: Nicola Gennaioli; Guido Tabellini
Abstract: We offer a theory of changing dimensions of political polarization based on endogenous social identity. We formalize voter identity and stereotyped beliefs as in Bonomi et al. (2021), but add parties that compete on policy and also spread or conceal group stereotypes to persuade voters. Parties are historically connected to different social groups, whose members are more receptive to the ingroup party messages. An endogenous switch from class to cultural identity accounts for three major observed changes: i) growing conflict over cultural issues between voters and between parties, ii) dampening of political conflict over redistribution, despite rising inequality, and iii) a realignment of lower class voters from the left to the right. The incentive of parties to spread stereotypes is a key driver of identity-based polarization. Using survey data and congressional speeches we show that - consistent with our model - there is evidence of i) and ii) also in the voting realignment induced by the ”China Shock” (Autor et al. 2020).
Keywords: Political polarization; Social identity; Cultural issues; Redistribution; Voter realignment
JEL Codes: D72; D74; P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| endogenous switch from class to cultural identity (P39) | increased conflict over cultural issues (F51) |
| endogenous switch from class to cultural identity (P39) | decrease in redistributive conflict (D74) |
| voters who identify culturally (J15) | increased polarization on social policies (J18) |
| voters who identify economically (K16) | decreased polarization on social policies (P39) |
| identity switch (P39) | dampens political conflict over redistribution (D72) |
| greater exposure to the China shock (F69) | greater anti-immigrant sentiment (K37) |
| greater exposure to the China shock (F69) | less demand for redistribution (D39) |