Envy in the process of development: Implications for social relations and conflict

Issues of conflict and peace have attracted much attention from economists. Among other factors, control over natural resources, inequality, political regime, and ethno-linguistic fragmentation have been examined as possible determinants of violent conflict, including civil wars. Culture—broadly defined as values, preferences, norms, and beliefs prevalent in a society—has recently come to the forefront of research on economic development, but its role in either provoking conflict or maintaining peace remains underexplored. This essay focuses on concern for relative standing, envy for short, as an important cultural link between inequality, institutions, development, and conflict. A remarkable feature of envy is that it can be either a source of strife and stagnation or, if channeled properly, an engine for peaceful competition and growth. It can be destructive or constructive. The essay begins by introducing the main stylized facts on envy and its two sides. It then presents elements of a basic theory that captures in a unified framework the qualitatively different equilibria arising in the presence of envy under alternative socioeconomic and institutional environments. The remainder of the essay discusses the emergence, persistence, and implications of envy-related norms and beliefs, especially the fear-of-envy culture and its relation to social conflict.