Oligarchy, democracy and ’la peur du déclassement’

Palaash Bhargava∗
November 29, 2018

Abstract
This paper analyses the impact of the fear of losing social status (la peur du déclassement) on the levels
of democratisation and economic growth. In a formal model where education makes an individual’s vote
count and generates positive externalities for all agents in the economy, I examine the incentives for the
elites to initiate a democratic transition by educating the masses when they care about both their status
(relative position in the income distribution) and their absolute incomes. In the context of imperfect
capital markets, the paper analyses the equilibrium patterns of political outcomes, income distribution,
and growth as a function of initial income, inequality, distortions from tax structures and externalities
from education. The model illustrates that a higher weight on status preference leads to a lower level of
democratisation and economic growth.

Keywords: Status Preferences, Democratisation, Economic Growth, Education, Political Economy

JEL Codes: D72, D91, O43

1 Introduction
Éric Maurin, in his recent book, ”La peur du déclassement. Une sociologie des récessions” (The fear
of downgrading: A sociology of recessions) (2009), extensively elaborates on how the sociological phenomenon
of fear of social decay (or losing one’s social status) has been an important issue for the French populace
for a long time. While such a fear had a role to play in specific responses to the recent financial crisis, he
clearly delineates the impact of such behavioral motivations on resistance towards policies regarding mixed
education schools. He also elaborates on how such a fear induces a highly protectionist behavior on the part
of the middle and upper class individuals.
While Maurin does a good job in documenting such a behavioral pattern within the French society, one
needs to be aware that such preferences aren’t restricted only to the French. As a matter of fact, one can
see abundant examples of such preferences and care for status amongst the most contemporary as well as
historical societies. Ther issue of status preferences in the current literature is noted in the following way:
People, in general, feel happy if they are rich. They prefer a rich life rather than a poor one. However, they
cannot regard themselves as rich until they recognize that others are poorer, since the concept of richness is a
relative one (Kawamoto (2009)). As a result, an individual’s utility is a function of the relationship between
his own income and the average income of the society. Evidence for the same can be seen in Easterlin (1974,
1995) and Clark and Oswald (1996).
While such status preferences are interesting to study in and of themselves within micro-economic theory,
one may ask what’s the relevance of the same in macro-economic outcomes and does incorporating non-
standard economic preferences within the microfoundations of the standard income inequality and growth
∗ New York University, Abu Dhabi and Delhi School of Economics

Electronic copy available at: https://ssrn.com/abstract=3204501

models change the outcomes of the same. There is a growing literature within economics which tackles this
question by exploring status-seeking behavior in growth-inequality models (Kawamoto (2009), Dupor and
Liu (2003), Corneo and Jeanne (1999, 2001, 1997), Fershtamn et al (1995), Long and Shimomura (2004)).
This paper takes a step further and tries to explore the potential political and economic impacts of such a
behavior and tries to explicitly understand the impediments it imposes on the process of democratisation in
political transition models.
Given the growth and welfare implications associated with democratisation, social scientists for a long
time have been concerned with determining the factors that help transitions towards democracy from an
oligarchy / autocracy or transitions towards stronger democracies from weaker democracies. Theoretically,
the hypothesis regarding the effects of democracy on inequality, as proposed by the seminal paper by Meltzer
and Richard (1981), has been extended, altered or even reversed by several extensions proposed by other
notable scholars (Persson and Tabellini (1994), Alesina and Rodrik (1994), Lizzeri and Persico (2004)).
1
However, the absence of a unifying consensus amongst empirics to support the aforementioned idea goads
us to explore if several factors at play such as growth, inequality and democratization are jointly determined
by individual incentives dependent on micro-economic behavioral foundations.
A substantial amount of work has been done in this field in the past to analyse the incentives for the
elites of an economy to initiate a process of democratisation (Acemoglu and Robinson (2001, 2003, 2006),
Bourguignon and Verdier (2001) Ades and Verdier (1996), Gradstein and Justmann (1995)). These incentives
range from threats of revolution and appropriation by the poor to exploiting positive externalities which arise
out of investments in public resources which lead to both higher levels of democracy and human capital.
This paper differs from the existing literature on political transitions and growth-inequality models with
status preferences in the following regard: one, it explores the impact of status seeking behavior within
political transitions (which hasn’t been analysed so far) and two, unlike the models proposed by Kawamoto
and others, the current model doesn’t rely on the characteristics of KAJ / RAJ (keeping up with the Joneses
/ running away from the Joneses) agents. Rather, it utilises the medium of investment into public resources
by the elites to explain changes in the level of democracy, growth and inequality.
The paper provides a more generalised framework of the original model by Bourgignon and Verdier (2001)
where education is both the engine of democratisation and growth2 . Assuming that the elites are status
seeking, i.e., they care about both their absolute material benefits and how far ahead they are from the
mean of the income distribution, the model predicts that the level of democratisation is substantially lower
if higher weights are placed on status seeking preferences. This is in line with the findings that even when
the policy space is extremely conducive for growth and the positive externalities from public spending are
extremely high, the process of sub-democratization within several pockets of larger democracies like India
(Anderson et. al (2011)) or the process of democratization historically within several countries has been
extremely slow and non-existent. This, therefore, helps us theoretically explain the existence of oligarchies
and democracies within countries with high levels of income or even relatively equal income distributions.
1 Muller (1988), Gradstein and Justman (1999), Huber and Stephens (2012), Scheve and Stasavage (2009). As a matter of
fact, there is no unifying consensus about what is the direction of causation and the impact that democracy has on inequality
and vice-versa. Similarly, determining the direction of causation between democracy and economic growth has been empirically
difficult (Barro (1996), Rodrik and Wacziarg (2004), Gerring et. al (2005)
2 The link between political participation and education has been a subject of investigation for sociologists and political

scientists for almost two decades now (Brady et. al (1995)). Even though the requirement of some level of education for political
participation might not be mandated by law, social scientists have been able to prove that the educated elite have been able to
diffuse their own ideas in the less educated population, thereby giving more weight to their vote and making this assumption of
the model somewhat valid. Other studies in economics and history (Elis (2011), Engermann and Sokoloff (2005, 2011), Brown
and Hunter (2004)) have shown such positive correlations between education and measures of democracy

Electronic copy available at: https://ssrn.com/abstract=3204501

 Interestingly, the original results proposed by Bourgignon and Verdier still hold in this model with an
additional parameter for comparative statics, namely, the importance of status viz-a-viz absolute incomes.
The paper is organized as follows. I first discuss the general setting and details of the model and
then follow it up with comparative static analyses. I then lay down several other functional forms I am
experimenting with which introduce the potential of multiple equilbria and democracy traps. This can help
us introduce a model which incorporate both history (in terms of path dependance) and expectations within
models of political transitions. I then discuss the possibilities to test the model by combining data on the
Polity scores (IV) for countries with the attitudes towards inequality captured by International Social Survey
Program, World Value Surveys or consumption of status goods along with possibly a bunch of controls for
public spending on education, level of inequality, per-capita GDP, country fixed effects and time fixed effects.
I then lay down plans of an experimental design which explore the role of status in such bargaining and
public goods games with efficiency losses. I finally conclude by shedding light on potential extensions yet to
be explored.

2 Model of Political Transition

2.1 General setting of the model
Picking up cue from the Bourguignon-Verdier model, consider an economy with its population scaled to
unity with the following characterstics. There initially exists two types of agents: the rich (oligarchs) and
the poor3 with exogenously determined initial earnings4 of y r and y p respectively (y r > y p ). The poor are
in majority (p > 1/2 where p is the proportion of poor in the population) and political participation in the
first period is exogenously limited to the oligarchs. In the second period, political participation depends on
the level of education which agents acquired in the first period.
Education has a fixed cost set to unity (1) and there are two types of return to education (apart from
determining your political participation): a private return R > 1 and a public return (positive externality)
which augments the income of all individuals (educated or not) by an amount equal to µE where E is the
overall proportion of educated people in the population (µ > 0). While all the costs are paid in the first
period, all returns accrue in the second period.
To keep the model simple and interesting, assume that there are no capital markets5 and the poor are
liquidity constrained, i.e., y r > 1 > y p .
Given R > 1 and y p < 1, the rich will always invest in their own education and the poor would not be
able to. However, given there are positive externalities coming from educating more people, the rich can
educate a select few members of the poor (which leads to the emergence of the so called middle class), thereby
initiating a process of democratisation. This however will definitely come at the risk of some redistribution
taking place if a critical proportion of poor get educated and vote for a tax rate that redistributes income
away from the rich.
To avoid making notations complex, I assume there is no discount rate between the two periods. If
the oligarchs as a class decide to help the poor, they may subsidize the education of e poor members by
transferring an amount f (T ) where T = e(1−y p ). The function f () allows the model to incorporate efficiency
3 You can assume them to be units of households instead of individuals who are making a decision regarding the outcomes

for their offsprings

4 Assume these to be contingent on the bequest or earning abilities they endow from their parents.
5 This may reflect pure moral hazard problems or other capital market imperfections. Even if I assume capital markets to

be imperfect rather than absent, the basic results of the model would still go through.

Electronic copy available at: https://ssrn.com/abstract=3204501

costs of taxation and transfer. Let
"  2 #
T T
f (T ) = +a y (1)
y y

where y is the mean income of the population6 in the first period:

y = py p + (1 − p)y r (2)

2.2 Details of the model

To keep the model familiar, I borrow notations and format from the Bourguignon-Verdier model wherever
necessary.
Let x capture the initial level of inequality between the oligarchy and the poor, i.e., x = y r − y p . This
along with Eq. 2 gives us:

y p = y − (1 − p)x
(3)
y r = y + px

Utilising the above information, I now analyse the optimal choice of the oligarchs and the new middle
class in terms of the proportion of poor (e) the former choose to subsidise and the tax rate the latter chooses
to implement (if they reach a voting majority).

2.2.1. Case (i): Oligarchy retains political control in the second period: e < 1 − p
With a zero discount rate, the total net income of a member in the oligarchy over the 2 periods as a
function of the number of educated poor, e, is given by:
" #
2
re (1 − y p ) + ae2 (1 − y p ) /y
Y (e) = (y − 1) − + [y r + R + µ (1 − p + e)] (4)
1−p

which given Eq. 3 can be written as

" #
2
1 − y + (1 − p)x (1 − y + (1 − p)x) /y
Y (e) = (y − 1 + px) − e − ae2
1−p 1−p (5)
+ [y + px + R + µ (1 − p + e)]

The first term in the square brackets refers to the first period net income (net of own education costs
and cost per oligarchy member of the transfer) and the second term refers to direct income plus educational
returns in period B.
Similarly, the total net incomes of a member of the poor class and a member of the newly educated
middle class over the two periods as a function of the number of educted poor e, are given by:

P (e) = y p + [y p + µ(1 − p + e)]

(6)
=⇒ P (e) = [y − (1 − p)x] + [y − (1 − p)x + µ(1 − p + e)]
6 Note that given the population of the economy is scaled to unity, this is also the total income of the population in period
A.

Electronic copy available at: https://ssrn.com/abstract=3204501

and

M (e) = [y p + R + µ(1 − p + e)]

(7)
=⇒ M (e) = P (e) + R − y + (1 − p)x

respectively. Therefore, the mean net income Y (e) of the economy over the two periods as a function of e
would be given by:
Y (e) = (1 − p)Y (e) + eM (e) + (p − e)P (e) (8)

Individuals in the economy care about both their absolute level of net income and their relative position
in the society (i.e. their status). To capture this assumption, let the utility function of a member from the
oligarchy be given by7 : h i
UR (e) = αY (e) + (1 − α) Y (e) − Y (e) (9)

where α and (1 − α) capture the relative importance an individual places over absolute income and his/her
relative position within the income distribution89 .
Given Eq. 8, we can rewrite the utility function of the oligarch as:
 
UR (e) = (α + (1 − α)p)Y (e) − (1 − α) e(R − y + (1 − p)x) + pP (e) (10)

Given the equations of Y (e) and P (e), we know that the oligarch will choose the value e∗ which maximises
its utility:
α(1 − p) (1 − α)(1 − p) y + (1 − p)x
µ− R−1+
α + (1 − α)p α + (1 − α)p α + (1 − α)p
e∗ = 2 (11)
2a (1 − y + (1 − p)x) /y
provided ofcourse the numerator is positive (otherwise e∗ = 0) and the oligarchy retains control in period 2,
i.e., e∗ ≤ 1 − p.10

2.2.2. Case (ii): Oligarchy loses political control in the second period: e ≥ 1 − p
In this case, the new middle class will be successful in implementing their preferred tax rate without the
oligarchs being able to veto it.
To keep the analysis simple, I assume the redistribution policy to be linear with a flat marginal tax rate,
τ , and a lump sum uniform transfer to everyone in the economy equal to:

c = τ y 2 (1 − aτ ) (12)

7 The Y (e)
correct way to capture relative position in the society (specifically for making it scale invariant) would be to use .
Y
However, to avoid complications in the calculation, I assume the given functional form. Moreso, in the current model, scale
variance doesn’t place a massive role
8 The problem would be much more interesting if instead of income, an individuals utility depended on a vector of income,

social capital, relative positions in terms of social capital and income. However, given that in most economies, your access to
social capital is closely correlated with your level of income (with exceptions abound, South Asia, several communities in US ),
for the ease of computation I restrict my analyses to income levels. Incorporating a multi-variable utility function depending
on several parameters to optimise on is work in progress
9 α is assumed to be exogenous for now. A future topic of potential research would be to see how this model operates if we

endogenise α w.r.t. the level of income and aspirations.

10 Note that the preferred tax rate for the oligarchs is always τ = 0. This might not be the case if even consider a Fehr-Schmidt

inequity aversion model (1999).

Electronic copy available at: https://ssrn.com/abstract=3204501

where, y 2 , the mean pre tax income in the population in period 2, is given by:

y 2 = y + (µ + R) (1 − p + e) (13)

The bracketed term in Eq. 12 accounts for the distortionary cost of tax / transfer.
Just like the oligarchs, the middle class also cares about its absolute income as well as its relative position
around the mean of the income distribution. However, I assume that they only take into account their income
and their position in period 2 to find out the optimal tax rate and treat period 1 as a foregone period.
The post tax and transfer net incomes in period 2 for the different classes is given by:

Oligarchs: olτ = [y r + R + µ(1 − p + e)] (1 − τ ) + τ (1 − aτ ) [y + (µ + R)(1 − p + e)]

Middle Class: miτ = [y p + R + µ(1 − p + e)] (1 − τ ) + τ (1 − aτ ) [y + (µ + R)(1 − p + e)] (14)
Poor: poτ = [y p + µ(1 − p + e)] (1 − τ ) + τ (1 − aτ ) [y + (µ + R)(1 − p + e)]

where the first term is the income after tax and the second term corresponds to the lumpsum transfer c.
Therefore, the mean post tax and transfer net income of the economy in period 2 from Eq. 14 is given
by:

y Bτ = (1 − p)olτ + (e)miτ + (p − e)poτ

(15)
=⇒ y Bτ = [y + (µ + R) (1 − p + e)] (1 − aτ 2 )

Thus, the redistribution which will be voted by the middle class is the tax and associated transfer which
maximizes its utility in period 211 , i.e., the solution of:

max UM (τ, e) = α[miτ ] + (1 − α) [miτ − y Bτ ] (16)

τ

The solution of this problem is given by:


0
 if (1 − p) x ≤ R (p − e)
τ∗ = (1 − p) x − R (p − e) (17)
 if (1 − p) x > R (p − e)
2aα [y + (µ + R) (1 − p + e)]


Given that the lump sum transfer in the redistribution mechanism depends on the mean income of the
population, we see that the middle class is in favor of some redistribution if and only if its pre-tax income is
below the mean pre-tax income of the whole population in period 2, y 2 . The gap between both incomes is
given by:

∆ = [y + (µ + R) (1 − p + e)] − [y − (1 − p) x + R + µ (1 − p + e)]
(18)
= (1 − p) x − R (p − e)

Therefore, no redistribution takes place if this gap is negative. And if it is positive, according to the second
part of Eq 17, the tax rate which is preferred by the middle class depends precisely on the size of this gap -
expressed relatively to the mean income of the population, y 2 , the weight they place on just their absolute
and relative income12 and on the distortionary cost of the tax.
11 To simplify, I assume the weights in the utility function to be identical across classes. This might necessarily not be the

case. The basic results of the model hold even if you let the weights differ across classes.
12 Higher the weight on the relative component (lower the α), higher the tax rate would be.

Electronic copy available at: https://ssrn.com/abstract=3204501

 One of the questions that Bourgignon and Verdier raise in their paper is whether this optimal tax rate
would be increasing or decreasing with the size of the middle class, e. In the absence of the educational
externality, any increase in the proportion of educated people would clearly raise the mean income of the
population without changing individual incomes within a particular class. It follows that the tax rate, τ ,
chosen by the middle class would increase with its size, provided that its income is below the mean income
of the whole population. However, the educational externality causes the relative gap between the income
of the middle class and the mean income of the population to decrease with e. Putting these two effects
together, it may be expected that the optimal tax rate chosen by the middle class will be an increasing
function of its size, e, only if the educational externality, µ is small enough. Mathematically, it can be shown
that:

∂τ ∗ (e)
   
 µ y
> 0 if R − (1 − p) x ≥ 0 or R − (1 − p) x < 0 and 1+ < (19)
∂e R (1 − p) x − R

This result goes through, even if we consider utility functions with the two components in our model instead
of just absolute incomes, since each component individually captures the same idea mentioned above.
Let’s consider the decision of the oligarch who needs to maximise its utility over the two periods. In the
case the middle class does not decide to impose any redistribution, i.e., the first case of Eq. 17., the utility
of the oligarch is the same as in case (i), i.e., Eq. 10. In the second case, it can be seen that the absolute
net income for each class changes in the following way:
For the oligarchs:

Ye (e) = Y (e) − AR (e) with

(20)
AR (e) = τ (e) [px + R (p − e)] + aτ ∗2 (e) [y + (µ + R) (1 − p + e)]
∗

For the poor:

Pe(e) = P (e) − AP (e) with

(21)
AP (e) = τ (e) [R(p − e − 1) − (1 − p)x] + aτ ∗2 (e) [y + (µ + R) (1 − p + e)]
∗

For the middle class:

Z(e)
e = Pe(e) + R(1 + τ ∗ (e)) − y + (1 − p)x (22)

where Ai (e) for i ∈ {Rich, Poor} is the additonal loss (gain) for the oligarch (poor) arising from the redis-
tribution imposed by the middle class.
Utilising the same functional form for the utility and assuming Ye represents the mean net income of the
e

economy over the two periods inclusive of tax and transfers, the utility of an oligarch as a function of e is
given by:

eR (e) = αYe (e) − (1 − α)[Ye (e) − Ye

U
e
]
(23)
= UR (e) + (1 − α)[pAP (e) − eRτ ∗ (e)] − (α + (1 − α)p)AR (e)

Putting cases (i), (ii) and Eq. 17. together, the utility of the oligarch as a function of the number of
poor whose education it decides to subsidize is thus given by:

Electronic copy available at: https://ssrn.com/abstract=3204501

 Figure 1


U (e)
R for e ≤ max [1 − p, eτ ]
U (e) =
Ue (e)
R for e > max [1 − p, eτ ] (24)
 x x
where eτ = p 1 + −
R R
The value of eτ comes from simplifying the condition under Eq. 18 which state that τ ∗ = 0 if (1 − p) x ≤
R (p − e)13 .
We now maximise Eq. 24 with respect to e. Fig. 114 shows various possible shapes of U (e) according to
eR (e) occurs at eτ or (1 − p). The figure is drawn in the
whether the switch happens between UR (e) and U
case where eτ is positive and Eq. 19 holds so that the loss inflicted on oligarchy by the middle class through
the tax rate τ ∗ (e) is increasing in e. The function UR (e) is a parabola with a maximum, e∗ , given by Eq.
11 - or possibly at zero if the numerator in Eq. 11 is non-positive. The function U
eR (e) coincides with UR (e)
below eτ and then diverges increasingly from it. It follows that the function U (e) is discontinuous at (1 − p)
when eτ < (1 − p), as in cases (iii) and (iv). It can be seen in Fig. 1 that the utility of the oligarchy is the
highest either at the maximum e∗ of UR (e) - cases (i) and (iii) - or at the maximum eo of U eR (e) - as in case
(ii). There is only one ambiguous case - case (iv) - where the discontinuity of the function U (e) makes it
possible that the maximum occurs at (1 − p) rather than at eo or e∗ .
No matter what the shape of U (e) is, it unambiguously decreases with a decrease in weight that the
oligarchy places on absolute income. Also, the maximising point unambiguously decreases to e∗ = 0, the
more one values status viz-a-viz absolute income (i.e. the more weight one places on relative income within
13 It is assumed in Eq. 24 that the tax rate imposed by the middle class cannot make the educational investment by the

oligarchy privately unprofitable.

14 The figure is scaled to capture all possible positions of e∗ and eo .

Electronic copy available at: https://ssrn.com/abstract=3204501

 Figure 2

the economy) (as seen in Fig. 2), thereby making the process of democratisation and growth slower or rather
impossible.
Fig. 1, therefore, lists down the possible state space (a vector of political regime and growth level15 ) the
economy might end up in contingent on the decisions made by the oligarchs in period 1 and by the middle
class (if any) in period 2.

2.2.2.1. (I) Pure oligarchy and no growth. This is the case where the maximum of UR (e) is at e∗ = 0
given the numerator of Eq. 11. is non-positive.
2.2.2.2. (II) Oligarchy with a minority middle class and medium growth. The maximum of
U (e) occurs on UR (e) at e∗ < 1 − p as in the case case (i) or (iii).
2.2.2.3. (III) Democracy with an accommodating ruling middle class and medium growth.
The maximum of U (e) . occurs on UR (e). at e∗ between 1 − p and eτ in case (i). The oligarchy accepts
to lose political control in favor of the middle class because it knows that the latter will not exercise its
redistributive power and also because it doesn’t place a huge emphasis on the loss they bear in terms of their
relative position (by their net incomes becoming closer to the mean).
2.2.2.4. (IV ) Ruling oligarchy with a middle class of (almost) equal size and medium growth.
This is the case where the maximum in case (iv) occurs at the discontinuity point (such that UR (1 − p) >
eR (eo )). The oligarchy would like to educate more poor people but, by giving them the political majority, it
U
would then lose both in the redistribution process (the new majority would impose) and in terms of relative
position they currently maintain within the income distribution.
2.2.2.5. (V ) Democracy, income redistribution and fast growth. The maximum of U (e) occurs
on UeR (e) at eo as in case (ii) or in case (iv). The oligarchy accepts to lose political control despite the
redistribution imposed by the ruling middle class, presumably because the educational externality is large
15 Growth in this two period model is captured rather naively. It captures the absolute increase in mean income of the
population from one period to the next.

Electronic copy available at: https://ssrn.com/abstract=3204501

 Figure 3

enough and they don’t care much about their relative position in the society (as much as they do for their
absolute incomes solely).
The optimising behavior of the agents can therefore land the economy in a rather wide range of situations.
Even though I term cases (IV ) and (V ) as democracy, it far away from universal voting. Perhaps a better
way to interpret these results would be to perceive these cases as extensions of effective enfranchisement,
i.e., the vote of more people matters16 . These various situations maximize the intertemporal welfare of the
oligarchy - in the two-period setting considered in this section - for some configurations of the parameters of
the model and initial conditions of the economy. I now turn to an analysis of these configurations.

2.3 Comparative Statics

The state space of the economy would actually depend on which of the solution out of (I) to (V ) actually
holds. This in turn would be determined by exogenously defined parameters and the initial conditions of the
economy. To keep the analysis similar to the Bourguignon-Verdier model, I map the five possible solutions
in the (x, µ)17 space in Fig. 318 ,. The effect of the other parameters is analyzed later as shifts of the curves
16 I do not allow for a case like Director’s law (where the middle class can impose a tax system which redistributes resources

from both the poor and the rich to the middle class Stiglitz (1970)) to occur in my model. That being said, that is entirely
a possibility in these political transitions and would result in very different comparative statics when it comes to evaluating
effective enfranchisement.
17 Education externality, µ, measures the benefit the oligarchy may get from educating the poor and the initial income

inequality, x, defines the extent of redistribution which will be undertaken by the middle class if it gets to power.
18 Note that this space must actually be restricted to values of x such that the liquidity constraint for the poor’s investment
 
y−1 1−y
in education is binding and the rich can always afford to invest in education, i.e., x > max , .
1−p p

Electronic copy available at: https://ssrn.com/abstract=3204501

appearing in Fig. 3.
The pure oligarchy solution (I) occurs when the numerator in Eq. 12 is non-positive, i.e.,

α(1 − p) (1 − α)(1 − p) y − (1 − p)x

µ≤ R+1− (25)
α + (1 − α)p α + (1 − α)p α + (1 − α)p

The corresponding region lies below line (D) in Fig. 3.

The area between Curve (C) and line (D) corresponds to solution (II) where some limited educational
transfers are made to the poor in the first period but the oligarchy retains (strict) political majority in the
second period. Curve (C) is obtained from the condition that the maximum of UR (e) occurs for a value e∗
smaller than (1 − p). The parabolic shape comes from the quadratic efficiency cost of transfers.
Above (C), the educational externality is big enough for the oligarchy to educate a proportion of the
poor which would get political majority in the second period. Two cases need to be distinguished here.
The first case corresponds to solution (III) where the new majority does not impose any income redis-
tribution in the second period and hence the oligarchy has nothing to fear. This case is delimited by the
condition that UR (e) is maximum at e∗ , above (1 − p) - which corresponds to the area above curve (C) - but
below the value eτ at which redistribution becomes profitable for the middle class. Curve (C’) in Fig. 3 is
therefore defined by:
e∗ ≤ eτ (C’)

But it is only relevant when:

R (2p − 1)
1 − p < eτ or x< (S)
(1 − p)
The second case corresponds to solution (IV ) where the new majority can potentially impose a redistri-
bution of income which would leave the oligarchy worse off. To prevent this from happening, the latter keeps
eR (eo ) be
political control and educates only (1 − p) of the poor. The condition for this case to hold is that U
such that:
eR (eo ) ≤ U R (1 − p)
U (C”)

This requires the opposite of condition (S) above and defines the curve (C”) in Fig. 3.
19
Finally, if the educational externality is large enough, or income inequality is small enough then the
economy lies above curves (C’) and (C”) in the (x, µ) plane, i.e. solution (V ) holds and redistribution with
democracy takes place.
The evolution of the economy critically depends also on other parameters of the model which are taken
as given in Fig 3. Let us briefly discuss their effects in turn.
An increase in the initial level of mean income, shifts the curve (D), (C), (C’) downwards and also reduces
the slope of (C) and (C’) in Fig. 3, thereby making the process of democratization (through education) more
likely.20 This provides a nice theoretical justification of what many empirical papers claim about more
economically developed countries / regions finding the process of democratisation easier and poor regions
getting trapped in oligarchic regimes21 .
A change in private returns to education shifts the curve (D), (C), (C’), (C”) upward by increasing the
value of the intercept. However, since the line (S) shifts towards the right, curve (C’) pivots further upwards
19 Keeping the weights placed on relative position in the society in the utility function small enough.
20 The shift in curve (C”) is not clear. Bourguignon and Verdier in their original paper claim that a curve like that does
atleast shift downward in the neighbourhood of (S).
21 Ceterus paribus.

10

Electronic copy available at: https://ssrn.com/abstract=3204501

and curve (C”) downwards. Other things being the same, this thus makes democratization and fast growth
less likely for relatively egalitarian societies but the effect is ambiguous for relatively inegalitarian societies.
It can be noted that the effect is less extreme when individuals don’t care about their relative incomes
(α = 1)22 and the ambiguity is resolved with relatively inegalitarian societies seeing higher levels of growth
and democratization with an increase in R.
The effect of a change in the cost of redistribution, a, is somewhat ambiguous. On one hand, a reduction
in a reduces the cost of educating the poor. On the other hand, it also increases redistribution by the middle
class when it gains political control and thus worsens the situation of the oligarchy in period 2. Under the
parametric conditions where the middle class opts for zero tax and redistribution, an increase in a (efficiency
cost) unambiguously slows down the process of democratization and growth, since educating poor becomes
costlier (Curves (D), (C) and (C’) pivot upwards).
Likewise, an increase in the initial proportion of the oligarchy in the population (1 − p) has ambiguous
effects. An increase in (1 − p) pivots and shifts the curve (D) downwards. Curve (C) rotates upwards but the
relevant portion of curve (C’) rotates downwards. Nothing can be said about (C”). Politically, this makes
sense since the oligarchs don’t worry too much about the emergence of a middle class if they, to begin with,
are in greater numbers, however, given the component of the oligarch’s income in the mean income would
have a much higher weight, the middle class (if it comes in ruling majority) would be less willing to opt for
zero redistribution (if they care about their relative position in the income distribution). As a result, the
solution space for accomodating ruling middle class regime shrinks.
One parameter is of specific interest. It can be seen that a decrease in α, i.e, an increase in the importance
that the agents place in their status (relative position in the society), significantly retards the process the
democratisation and growth. Given that educating the poor (middle class) (even if no redistribution takes
place) increases the incomes of the middle class, the gap between the oligarchs and the middle class reduces.
Therefore, if the ruling class is inequality and status seeking and actually has a utility function which is
increasing with respect to the gap between their income and the mean income, i.e.,

d
U (e) > 0 where β = Ye (e) − Ye (26)
e
dβ
they would be less and less willing to educate more people as the weight on the relative component
in their utility function increases. Fig. 4 shows how the area under solution (I) (Pure Oligarchy regime)
increases drastically as the weight on absolute incomes (α)23 in the utility functions fall and democratisation
becomes impossible when α = 024 .
On the whole, Fig. 3 and the preceding remarks suggest then a relatively complex relationship between
income distribution, democracy and growth. The complexity comes primarily from the fact that this relation-
ship must be considered dynamically where one must consider simultaneously not only the level of national
income in the second period, but also its primary distribution among the various classes of individuals, the
extent of redistribution, and the degree of democratization. As in other models, the more inegalitarian is
the economy in a first period, the less it invests in education and the less it grows. However, even if the
relative level of inequality is low and the positive externality coming out of the process of democratization
is supremely high, if agents within an economy care solely about their relative incomes, they would halt
the process of democratisation. Therefore, economies which are initially richer, less inegalitarian and more
22 Even curve (D) and (C) don’t shift upwards under α = 1.
23 Or weight on status (1 − α) increases
24 Area under solution (I) for α = 0 is the whole positive quadrant of the (x, µ) space

11

Electronic copy available at: https://ssrn.com/abstract=3204501

 Figure 4: Solution for pure oligarchy regime

cohesive not only grow faster but also democratize and redistribute income sooner.
It must be stressed, in particular, that the model does not predict that democracies necessarily exhibit a
more egalitarian distribution of income than oligarchies. In the case where the oligarchy decides to educate
only a fraction of the poor - i.e. e < p - it can be seen that the distribution of primary incomes may become
more unequal in period 2 than it was in period 1. This is so because, even though everybody benefits from
the educational externality, only the rich and the middle class do benefit from a direct increase in their
income due to education. On that basis, the partial democratization of the economy does not necessarily
improve the distribution of primary incomes.
An interesting outcome of the model in matter of income redistribution is that, contrary to what is
usually assumed or found in the recent literature, redistribution is not necessarily associated with a high
degree of primary income inequality. In Fig. 3, redistribution occurs only on the left-hand side of curves
(C’) and (C”) , i.e. other things being the same, for relatively low levels of income inequality. The reason
for this result is simply that if the degree of income inequality were initially higher, then the oligarchy would
block the democratization process or would only permit a ruling middle class which would not redistribute.
This suggests that there may be significant simultaneity biases in cross-sectional analyses where income
redistribution is explained by initial income inequality and the nature of the political system.

3 Other Functional Forms

The model described above always gives us unique solutions contingent on the values the initial parameters
of the model take. As a result, we can not incorporate any possibility of multiple equilibria and show the
role that either history or expectation may play in a dynamic framework. Moreover, the utility component
capturing status seeking preferences is not scale invariant25 . I will take these issues one by one now in the
subsections below. While the dynamics and the solutions of these models haven’t been completely worked
out, I would like to shed some light on the preliminary work done so far.
25 Let the mean income in the economy by a and the income of the oligarch be 10a. Effectively, a = 500 vs a = 5000 shouldn’t

make a difference to the total utility of the oligarch. Note that this is not the case in the model specified in section 2, since
h i Y (e)
status-seeking preferences are captured by differences rather than ratio, i.e. Y (e) − Y (e) instead of
Y (e)

12

Electronic copy available at: https://ssrn.com/abstract=3204501

3.1 Incorporating Scale Invariance
Keeping the basic fundamentals of the model same, consider the following variation:
The utility of the oligarch, as before, depends on the absolute level of net-income generated over two
periods and his relative status within the society. However, the relative status is now dependent on the level
of his human capital with respect to the average level of human capital in the society. If each educated
individual is endowed with one unit of human capital then the total or the average26 human capital in the
economy is given by [(1 − p) + e]27 . Therefore, the utility function of the oligarch is:

1
UR (e) = Y (e) + β
(1 − p) + e

(27)
" #
p 2 p 2
e (1 − y ) + ae (1 − y ) /y
where Y (e) = (y r − 1) − + [y r + R + µ (1 − p + e)]
1−p

Y (e) is the absolute net income after transfers and returns without taxation, β is the co-efficient which
1
denotes how much an individual values status and is the scale invariant component of the utility
(1 − p) + e
function which captures status seeking preferences.
As usual, the oligarch maximises his utility with respect to ’e’ i.e. optimising over the number of poor
he wishes to educate.
Given that the first order conditions now require us to find the roots of a third degree polynomial and the
second order conditions requires us to compute the derivative of a rational function with a denominator of
power 2, doing so without specifying the values of the initial parameters would be computationally intense.
Fig. 5 shows two utility functions plotted for differing values of y i.e. the average level of pre-transfer
income in period one while fixing the values of all other initial paramters. (y 1 > y 2 ). It is clear from the
figure that the function has a vertical asymptote as e = p − 1 which is negative and outside our domain.
The function has both a local max and a local min. However, for U1 , the global max occurs at e∗1 > 0 which
is also a local max and for U2 , the global max is a boundary solution with e∗2 = 0.
If we ignore the existence of local minima in these functions, the new scale invariant functions give us
similar economic results in the general model as before. Therefore, for the ease of computation, we can stick
to the original functional forms proposed.
However, the existence of such local minima can be exploited to explain a new democratic framework.
Assuming adjustment costs, if the level of democracy is contingent on the level of public expenditure made
in education, several economies that start out to the left of the local minimum may see decreasing returns to
such investments in the initial periods and hence would not find it optimal to invest in such public resources
whereas the economies which start from the right of the local minimum will see increasing returns. This
phenomenon would then creates a path dependance where lower levels of initial education in an economy lead
to further lower investments in education in the future and higher levels of initial education would lead to
further higher investments in education. As a result different economies for the exact same initial conditions
apart from levels of initial education may gravitate towards different equilibria thereby either strengthening
the hold of oligarchy in one case and strengthening democracy in the other.
26 Since population is scaled to unity
27 Assuming human capital is a linear function of education with slope 1 and y-intercept 0

13

Electronic copy available at: https://ssrn.com/abstract=3204501

 Figure 5: Scale invariant utility functions

The exact dynamics of the model pinning this path dependance is still work in progress.

3.2 Log-Utility functions

Consider now an optimisation problem where, as before, the returns from education are both public and
private. Further assume that the oligarch gets the maximum level of education as an endowment from his
parents and the poor are liquidity constrained (and hence can not invest in education for themselves or their
offsprings). Given that the population is scaled to unity and every member of the oligarchy (and the poor
class) have similar preferences, we can analyse the framework as a game between two representative agents
coming from the oligarchy and the poor class.
Public returns to education for the oligarch now are a function of the level of investment that he makes
into the education of the poor. Assume the return to be linear for now. As before, the status preference
is captured by the ratio of the level of human capital the oligarch has to the total level of human capital
present in the society. Let the level of human capital for the oligarch be h and the level of human capital
for the poor be equal to the investment the oligarch makes in his education.
The modified utility function for the oligarch, therefore, is as follows:
 
h
UR (e) = ln (x − e) + ln (x + R + µe) + β ln (28)
h+e
where x is the initial level of income the oligarch in endowed with, e is the level of investment he makes
into the education for the poor, R is the private returns to education the oligarch gets in the next period,
µ is the public rate of return from educating the poor and β is the coefficient which denotes how much
the oligarch values status. The scale invariant component of the utility function which captures status
seeking preferences is a now strictly twice differentiable concave function (which captures the idea that the
oligarch cares about being far away from the mean but his marginal utility is diminishing with respect to

14

Electronic copy available at: https://ssrn.com/abstract=3204501

this component)28 .
The maximisation problem for the oligarch, therefore is:
 
h
max UR (e) = ln (x − e) + ln (x + R + µe) + β ln s.t. e ≤ x (29)
e h+e
Setting up the Kuhn-Tucker gives us the following:
 
h
L = ln (x − e) + ln (x + R + µe) + β ln + λ(x − e) (30)
h+e
The KKT conditions dictate the following:

Le ≤ 0 , e ≥ 0 with eLe = 0
(31)
e−x≤0 , λ ≥ 0 with λ(x − e) = 0
Given the log specification of the utility function, we know that e 6= x and hence due to complementary
slackness λ is equal to 0.
This simplifies our analysis and helps us drop the term λ from the equation:

−1 µ β
Le = + − −λ=0
x − e x + R + µe h + e
(32)
−1 µ β
=⇒ + − =0
x − e x + R + µe h + e

If β = 0, i.e., there is no status seeking component in the oligarch’s utility function and:

(µ − 1)x − R)
e∗ = (33)
2
which is increasing in public returns and decreasing in private returns to education, as expected. However,
if β > 0, the solution for the above equation is given by the roots of the following equation:

µ(β − 2)e2 + [(1 − β)((µ − 1)x − R) − 2µh]e + [h((µ − 1)x − R) − b(x(x + R))] = 0 (34)

While the solution seems arbitrarily complex, let us analyse the solutions of the equation with fixed
values of x, R, µ and h, while we vary the value of β to understand the impact of status preferences.
For x = 10, R = 2, µ = 4 and h = 5,
 p
2
 (7β + 3) ± (7β + 3) − 20(β − 2)(7 − 6β)

for β 6= 2
e∗ = 2(β − 2) (35)
 25

for β=2
3
d ∗
In the region of interest, i.e., β ≥ 0, we know that e <0
dβ

In Fig. 6,
28 This also helps us capture the original KAJ/RAJ (Keeping up with the Joneses / Running away from the Joneses)
preferences which I am currently exploring within the model

15

Electronic copy available at: https://ssrn.com/abstract=3204501

 Figure 6: e∗ as a function of β, e2 is the only unique solution if β ≥ 0

p
(7β + 3) + (7β + 3)2 − 20(β − 2)(7 − 6β)
e1 =
2(β − 2)
p
(7β + 3) − (7β + 3)2 − 20(β − 2)(7 − 6β)
e2 =
2(β − 2)

However, note that the value of e1 (solution with the positive sign) would always turn out to be greater
than x and hence we can rule that out as a possibility. Therefore, unlike the model in part 3.1, we will not
run into a case of multiple equilibria. However, conditional on the initial parameters, even under no status
seeking preferences, the investment into education for the poor will never be socially optimal and would
always be retricted to a limited range.
Working out the exact dynamics of the process along with taxation and the cases where the oligarch is
inequality or status averse is still work in progress.

4 Future Work
4.1 Empirical Analyses
The World Value Survey (WVS) is a repeated cross section data set which has systematically documented
attitudes towards income inequality, wealth accumulation, material possession, public education and com-
petition amongst a random sample of individuals at a micro level (codes: E039, E041, E052, E063, E066,
E146, E149) from 1981 to 2016 for several countries. The data collection procedure took place over 5 waves
29
and data for most of the countries have been collected atleast twice in the last 35 years . The survey
captures information on both the perceptions of individuals of what the current characterstics of the society
are and what the society should aspire for in terms of the optimal level of inequality, wealth possession,
29 Some countries have been covered in almost all the waves and the dataset also provides information by regional splits

within the country

16

Electronic copy available at: https://ssrn.com/abstract=3204501

envy, educational spending etc. On the other hand, the Polity IV dataset, gives us information regarding
the fundamentals and the level of democracy for each country captured in the WVS for the required time
frame. Combining these datasets with controls for current level of GDP/capita, Gini Index, Public spending
on education which are available within the FRED and the PovcalNet database, we can get pretty good
first estimates of correlational evidence between the strength of status seeking preferences and the level of
democracy and the level of spending in public resources meant to increase the human capital in the economy.
Given that there exists information on both the current perceptions of inequality and material posses-
sions and the aspirations regarding optimal levels of inequality and educational spending, we could very
efficiently capture status seeking preference at an aggregated level and try to study the impact of the same
on democratisation.
I am currently in the process of cleaning the WVS data and matching these attitudes within countries to
the corresponding Polity Scores and past and future lags of Polity Scores of the respective countries. While
the analysis would be mostly cross-sectional30 , this would definitely be a starting point to provide empirical
merit to the theoretical foundations that the model proposes.

4.2 Experimental setup

Notwithstanding issues of external validity, we can test the hypothesis proposed by the theoretical model
via a laboratory experiment. I am in process of designing an experiment which specifically illicits such
preferences of the individuals and tries to study the impact of the same on the level of contributions they
make in a public goods game.
Work on status seeking preferences within experimental economics is not incredibly novel. Papers by
several scholars (Schram et al (2018), Alpizar et al (2005), Ball and Eckel (1996)) in the past have tried
to analyse the impact of status within gender dimensions, consumption and bargaining. However, to my
knowledge, there hasn’t been any work which tries to study the impact of status seeking preferences on
public goods provision and political economy game theory models within the lab.
I plan to incorporate the model proposed in a simple public goods game where the investment is made
only by one type of player and the consequences of the investment are manifold. Moreover, I plan to vary
the treatments in terms of the relative importance placed on status in non-monetary terms. The experiment
is currently being designed in Z-tree.
Just as the original model, the rich subjects in the game make a decision about educating the number of
the poor subjects at some cost (which is equally divided amongst all the rich players). The median proposal
(m) about the number of poor subjects to educate gets implemented and m subjects from the poor class are
chosen randomly to benefit from this move. The rich also make a decision to educate themselves or not31 .
In period 2, as per the model, each educated subject gets a private return from education and every subject
in the game gets a public return contingent on the total number of educated subjects in the round. All
educated subjects vote on a tax rate for redistribution and the median tax rate is chosen. Tax and transfer
calculators are provided to the subjects to reduce the cognitive effort required for calculating optimal tax
rates. At the end of every round, the players are intimated about their total payoff.
In the control, the rich and poor status are randomly assigned and they are never primed for status. The
treatments vary in the following regards:
30 Since the same individuals aren’t interviewed over time and the countries aren’t coverred every year, they might be covered

in every wave or perhaps twice in the five waves

31 Although this is trivial given that the private returns to education are always going to exceed the cost of education

17

Electronic copy available at: https://ssrn.com/abstract=3204501

Treatment 1: The rich vs poor status is based on the results of a real effort (non-mathematical) task.
Treatment 2: The subjects are primed towards status by being shown their total payoff and also their payoff
relative to the average payoff in the round. Treatment 3: The subjects’ avatars receive stars / non-monetary
appreciation if they are ahead of the average distribution by a specific amount.
I also plan to carry out a treatment in which instead of dividing the subjects into just rich and poor
classes, there is a distribution of incomes within each class.
The aim of the experiment is to then study the differences in median level of proposals made by the rich
in terms of educating the poor and the differences in median tax rates proposed across treatments, to make
some inferences regarding the impact of status preferences.

5 Conclusion
The hypothesis and the conclusions proposed by the paper should be taken in the stride of understanding
the impact of status seeking preferences on effective enfranchisement and the level of democratisation within
an economy while controlling for several other factors like inequality, returns to human capital and level of
income. While it is common knowledge that people value status, the model tries to shed light on a specific
medium through which higher affinity to status can perversely impact macro-economic outcomes and policies
directed towards improving the level of democracy and human capital in a country. The existence of such
an effect, therefore, calls for a specific intervention which tries to shape incentives for the agents in a socially
optimal way and reduces the level of social stratification which infact plays a role in the formation of such
status seeking preferences.

References
Acemoglu, D., Robinson, J.A., 2001. A theory of political transitions. Am. Econ. Rev. 91, 938-963.
Acemoglu, D., Robinson, J.A., 2006. Economic Origins of Dictatorship and Democracy. Cambridge Univer-
sity Press, New York, NY.
Ades, A., Verdier, T., 1996. The rise and fall of elites: economic development and social polarization in
rent-seeking societies. CEPR Discussion Paper No. 1495.
Alesina, A., Rodrik, D., 1994. Distributive politics and economics growth. Q. J. Econ. 109, 465-490.
Alpizar, F., Carlsson, F., Johansson-Stenman, O., 2005. How much do we care about absolute versus relative
income and consumption? J. Econ. Behav. Org., 56, 405-421.
Anderson, S., Franc ois, P., Kotwal, A., 2011. Clientelism in Indian Villages.
http://faculty.arts.ubc.ca/fpatrick/documents/clientAERmay1313.pdf.
Ball, S. B., Eckel, C. C., 1996. Buying status: Experimental evidence on status in negotiation. Psychology
and Marketing, XIII, 381-405.
Barro, R.J., 1999. Determinants of Democracy, J. Polit. Econ. 107, S6, S158-S183.
Bourguignon, F., Verdier, T., 2001. Oligarchy, democracy, inequality and growth, J. Dev. Econ. 62, 285-313.
Brady, H., Verba, S., Schlozman, K.L., 1995. Beyond SES: a resource model of political participation. Am.
Polit. Sc. Rev. 89 (2)., 271-294.
Brown, D.S., Hunter, W.A., 2004. Democracy and human capital formation: educational expenditures in
Latin America. Comp. Polit. Stud. 37, 842-864.
Corneo, G., Jeanne, O., 1997. On relative wealth effects and the optimality of growth. Econ. Lett. 54, 87-92
Corneo, G., Jeanne, O., 1999. Pecuniary emulation, inequality and growth. Eur. Econ. Rev. 43, 1665-1678
Corneo, G., Jeanne, O., 2001. Status, the distribution of wealth, and growth. Scand. J. Econ. 103, 283-293
Dupor, B., Liu, W.-F., 2003. Jealousy and equilibrium overconsumption. Am. Econ. Rev. 93, 423-428
Easterlin, R.A., 1995. Will raising the incomes of all increase the happiness of all?. J. Econ. Behav. Organ.

18

Electronic copy available at: https://ssrn.com/abstract=3204501

27, 35-47
Easterlin, R.A., 1974. Does economic growth improve the human lot? Some empirical evidence. In: David,
P.A., Reder, M.W. (eds) Nations and Households in Economic growth: essays in honor of Moses Abramovitz.,
Academic Press, New York
Elis, R., 2011. Redistribution Under Oligarchy: Trade, Regional Inequality and the Origins of Public
Schooling in Argentina, 18621912. Unpublished, Ph.D. Dissertation, Department of Political Science, Stan-
ford University.
Engerman, S.L., Sokoloff, K.L., 2005. The evolution of suffrage institutions in the New World. J. Econ.
Hist. 65, 891-921.
Engerman, S.L., Sokoloff, K.L., 2011. Economic Development in the Americas since 1500: Endowments and
Institutions. Cambridge University Press, New York, NY.
Fershtman, C., Murphy, K.M., Weiss, Y., 1996. Social status, education, and growth. J. Polit. Econ. 104,
108-132
Gerring, J, Bond, P., Barndt, W., Moreno., C. 2005. Democracy and Economic Devel-opment: A Historical
Perspective. World Polit. 57, 323-64.
Gradstein, M., Justman, M., Meier, V., 2004. The Political Economy of Education: Implications for Growth
and Inequality. MIT Press, Cambridge.
Gradstein M., Justmann, M., 1995. A political interpretation of the Kuznets curve. Mimeo.
Huber, E., Stephens, J.D., 2012. Democracy and the Left: Social Policy and Inequality in Latin America.
University of Chicago Press, Chicago, IL.
Kawamoto K., 2009. Status-seeking behavior, the evolution of income inequality, and growth. Econ Theory
39, 269-289
Lizzeri, A., Persico, N., 2004. Why Did the elites extend the suffrage? Democracy and the scope of govern-
ment, with an application to Britains age of reform. Q. J. Econ. 119, 707-765.
Long, N.V., Shimomura, K., 2004. Relative wealth, status-seeking, and catching-up. J. Econ. Behav. Organ.
53, 529-542
Maurin, E., 2009. La peur du dclassement. Une sociologie des rcessions, Editions du Seuil
Clark, A.E., Oswald, A.J., 1996. Satisfaction and comparison income. J. Public. Econ. 61, 359-381
Meltzer, A.M., Richard, S.F., 1981. A rational theory of the size of government. J. Polit. Econ. 89, 914-927
Muller, E.N., 1988. Democracy, economic development, and income inequality. Am. Sociol. Rev. 53 (1),
50-68.
Persson, T., Tabellini, G., 1994. Is inequality harmful to growth? Am. Econ. Rev. 84, 600-621
Rodrik, D., Wacziarg, R., 2005. Do Democratic Transitions Produce Bad Economic Outcomes? Am. Econ.
Rev. 95 (2), 50-55.
Scheve, K., Stasavage, D., 2009. Institutions, Partisanship, and Inequality in the Long Run. World Polit.
61, 215-253.
Schram, A., Brandts, J., Gerxhani, K., 2018. Social-status ranking: A hidden channel to gender inequality
under competition. Experimental Economics.

19

Electronic copy available at: https://ssrn.com/abstract=3204501