Income Inequality and Global Political Polarization: The Economic Origin of Political Polarization in the World

Abstract

Both income inequality and political polarization have increased dramatically in much of the world over the past few decades. One might wonder how these two phenomena correlate with each other. Are there any striking similarities in the correlated patterns of income inequality and polarization across the globe? More importantly, how can improved equality in income distribution contribute to mitigate political polarization? Although the potential polarizing effects of income inequality is a growing concern, the evidence provided by the existing literature, however, has been mixed and incomplete. This research seeks to address the shortcomings of the current scholarship by using the repeated cross-sectional data from six waves of the World Values Survey from 1990 to 2020, to investigate whether and how widened income inequality and growing political polarization are linked globally. The findings indicate that there is a positive and statistically significant cross-country association between levels of income inequality and political polarization. The results remain robust to different specifications. This research has the potential for advancing the study of linkages between income inequality and its political consequences.

Keywords: income inequality; political attitude; political polarization; populism.