ABSTRACT
Inequality of various sorts – income inequality, gender inequality, social inequality – is arguably the most significant source of conflict, as individuals value relative positions more than absolute positions. In democracies, the threat of a political backlash from inequality is more severe, often leading to the adoption of redistribution policies as well as settling for a smaller rate of growth – known as the Democratic Middle Phenomenon – to mitigate the conflict. This is because, a faster rate of growth poses a bigger threat to the incumbent government by accentuating income inequality more substantially in the short term. However, a smaller rate of growth constrains the scope of redistribution. Consequently, income inequalities in democracies, though they may be less alarming compared with those in autocracies, may persist. Conflicts are thus not resolved but only mitigated.
