Inequality, Social Comparison, and Relative Deprivation Author(s): William H.

Panning Reviewed work(s): Source: The American Political Science Review, Vol. 77, No. 2 (Jun., 1983), pp. 323-329 Published by: American Political Science Association Stable URL: http://www.jstor.org/stable/1958918 . Accessed: 16/03/2013 08:24
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp

.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.

American Political Science Association is collaborating with JSTOR to digitize, preserve and extend access to The American Political Science Review.

http://www.jstor.org

This content downloaded on Sat, 16 Mar 2013 08:24:24 AM All use subject to JSTOR Terms and Conditions

Inequality, Social Comparison, and Relative Deprivation

WILLIAM H. PANNING
The University of Iowa In this article I present a formal model of relative deprivation and demonstrate its implications concerning the relationship between inequality and political instability. The model, which is based on assumptions similar to those of Nagel (1974), implies that the relationship of instability to inequality can be either curvilinear, as Nagelfound, or linear, as Russett (1964) found, although under different conditions. In both cases the model implies that reducing inequality reduces the level of relative deprivation, thereby enhancing the prospect for political stability. However, changes in the tendency of individuals to compare their lot with that of others can also substantially affect the level of relative deprivation in a society.

The relationship between the political stability of nations and the magnitude of economic inequality among their citizens is a topic of perennial interest to political scientists and of potential importance to policymakers. During the past two decades a number of studies have appeared that purport to determine empirically the relationship between these two variables. Four of these studies are of particular interest here. The first, by Russett (1964), used cross-national data on land tenure and reported a positive relationship between inequality and instability: the greater the inequality, the greater the instability. However, this finding was challenged by Mitchell (1968) in a study of province-level data from South Vietnam. Mitchell found that the greater the inequality, the less the support for revolution (i.e., the greater the extent of control by the Saigon government). After Mitchell's study had been strongly criticized on methodological grounds by Paige (1970), Sansom (1970), and Paranzino (1972), Russo (1972) reanalyzed Mitchell's data, using different measures of the crucial variables, and found no relationship whatsoever between inequality and support for revolution. Finally, in another reanalysis of that same data, using Russo's measures, Nagel (1974) found that the relationship between inequality and discontent (Nagel's term for the same dependent variable) was curvilinear: maximum discontent occurred at intermediate levels of inequality of land tenure. That there should be so little agreement, even among studies based on the same data, is disconcerting, especially since the relationship between inequality and stability is one that has important implications for American foreign policy.

Mitchell's article, for example, which originated as a RAND study, was used as supporting evidence by officials who opposed efforts to promote agrarian reform in South Vietnam (Russo, 1972, pp. 315 and 324). At'the present time, the efficacy of land redistribution for maintaining or restoring political stability is again being debated by officials responsible for our policies toward El Salvador and other Latin American countries. A fresh look at the problem is therefore in order for practical as well as for intellectual reasons. Two approaches are possible. One approach is to add another empirical study to those that have just been recounted. To do so would certainly be useful but could hardly be convincing, since the problem of measuring the relevant variables and of controlling for'the numerous country-specific factors that obscure the relationship in which we are interested are indeed enormous ones. Instead, I shall adopt a second approach: I shall demonstrate that there are very strong theoretical grounds for choosing among the empirical studies that have already been carried out. Specifically, I shall present a formal model of relative deprivation and demonstrate its implications with regard to the effect on relative deprivation of variations in inequality. These results are pertinent to the relationship between inequality and instability insofar as the total relative deprivation in a society is a principal determinant, although not necessarily the only one, of its political stability. Virtually all the previous studies of inequality and instability have assumed that this is indeed the case. Whether such an assumption is warranted must be considered on another occasion. A Formal Model of Relative Deprivation Like Nagel (1974), I shall'begin by assuming that inequalities in a society affect the behavior of its members only if those individuals compare their own lot with that of others and as a result

I am especially indebted to Jack Nagel for his thoroughand helpful critiqueof an earlierversionof this article.

323

This content downloaded on Sat, 16 Mar 2013 08:24:24 AM All use subject to JSTOR Terms and Conditions

324

The American PoliticalScienceReview

Vol, 77

become gratified or dissatisfied. Nagel then preR = Xma Xminsents two postulates that will serve as the basis of the model developed here. First, "the more un- The denominator R constrains Dij to values be. equal the assets of two individuals, the less happy tween zero and one. We now define Pij, the probthe poorer will feel if he compares himself with ability that individual i will compare his wealth to the richer" (p. 454). Second, the tendency of two that of individual j, as individuals to compare their own wealth with that of the other varies inversely with the difference in + (K2- KI)Dij, (2) Pij=K1 their wealth (p. 455). This second postulate is drawn from Festinger's (1954) theory of social where K1 is the probability of comparison becomparison processes and is supported by evi- tween two individuals with equal wealth and K2 is dence presented by Runciman (1966). the probability of comparison between the poorAs Nagel shows, these two postulates imply est and the wealthiest individuals in the society. that, for two individuals, the expected discontent Note that this formulation of Pij is more general of the poorer will be greatest when their difference than the analogous one used by Nagel (1974). It in wealth is moderate, rather than large or small. assumes only that the probability of comparison If their difference in wealth is small, comparison between i and j is a linear function of their difis highly probable, but the resulting discontent ference in wealth. Whether Pij is an increasing or will be small. If, on the other hand, their dif- decreasing function of Dij (or indeed constant) ference in wealth is great, then comparison pro- depends upon the particular values chosen for the duces high discontent but is unlikely to occur. parameters K1 and K2. Note, finally, that since Dij Although the inference that Nagel derives from -Dij, it follows that Pji = PusX his postulates is correct, it applies only to the twoThat the tendency to make comparisons (here person case. Whether or not the same curvilinear represented as P1j) depends on the difference berelationship between inequality and discontent tween two individuals with regard to some characholds at the aggregate level, for the n-person case,. teristic was originally regarded by Festinger (1954) has not yet been established. Nagel's conjecture as a psychological proposition. It purports to that it does (1974, p. 454, n. 5) was supported by describe how we select the individuals with whom his Vietnam data, but in the absence of a more secure theoretical foundation, his empirical finding remains one among many conflicting results. 'Equation(2) is the only equationthat is consistent The task at hand, then, is to supply the missing with the followingassumptions: (a) sincePij is a probability, it has a maximumvalue of 1 and a minimum theory. Let X represent some asset possessed by the in- value of 0 [as do K, and K2];(b) Pij is a linearfunction dividuals in a society, and let Xi be the amount of Dij;(c) Pij = K, whenD,1 = 0; and (d)Pij = K2when = 1. A proof of this is straightforward. From possessed by individual i. For convenience, we Dj assumption(b) it follows that shall refer to X simply as wealth. Let Cij be the relative deprivation of individual i that arises from (e) Pij = A + B(Dy), his comparison of his own wealth with that of individual j. Nagel's first postulate states that if Xj whichis the generalformof a linearequation.It follows > Xi, then Ci is an increasing function of that when D,1 = 0, then Pij = A. But assumption(c) = = A = K1. (Xj - Xi), the difference in wealth between the tells us whenDij 0, P,1 K1.Consequently, two individuals. Otherwise, Cij will be zero. That Thus, (e) can be restatedas is, (f) Pj = K, + B(Dij). = max [(Xj-Xi),I 0. Ci, Now considerthe case in whichDj = 1, its maximum possible value. In this case Pij = K, + B. But from Nagel's second postulate states that the tenden- assumption(d) we know that when Du = 1, Pij = K2. cy of some individual i to compare his wealth with Substituting K2 for Pij in equation(f) gives us that of another individual j varies inversely with the difference in wealth between them. In order to (g) K2 = K, + B, take this possibility into account, we first define from whichit directlyfollows that B = K2 K1. SubDij, the difference in wealth between individuals i stitutingthis resultinto equation(f) thus gives us and j, as (h) P1 = K, + (K2- K)Dij, l Dij = I Xi - Xj I IR, whichis identicalto equation(2) in the text. SinceKl, where R, the range of wealth in the society, is K2,andDij all varybetweenzero and one, this equation defined by the equation also satisfiesassumption (a).

This content downloaded on Sat, 16 Mar 2013 08:24:24 AM All use subject to JSTOR Terms and Conditions

1983

and RelativeDeprivation Inequality,SocialComparison,

sum(i)sum(j) I XXJ

325

we compare ourselves. However, it can also be interpreted sociologically, as a consequence of the differential opportunities for comparison that exist within a typical social structure. Most activities that occur in society tend to bring people who are similar into frequent contact with one another (Feld, 1982; Fischer et al., 1977). As a consequence of such nonrandom interaction, there is greater opportunity for an individual to compare himself to similar than to dissimilar individuals, quite apart from the relative abundance of such individuals in society. In either case, K1 and K2 here represent the upper and lower bounds on the probability of comparison. So far we have considered only the relative deprivation of a single individual that results from his comparison of his wealth with that of only one other individual, j. The total relative deprivation (7) in a society is the sum across individuals in that society of the relative deprivation engendered by each of the pairwise comparisons made by those individuals. That is,

ond term on the right side of equation (6). We find that

sum(i)sum(j) 12 I XXj = sum(i)sum(j)(X,-Xj)2,

12 that appears in the sec-

sum(i)sum(j)(X12 - 2XiXj + Xj2),

= (N)sum(i)Xi2

+ (N)sum(j)Xj2

2sum(Q)sum(/)XXj, where N is the number of individuals in the society. Now since i and j are indexed over these same N individuals, it follows that (N)sum(j)Xj2 = (N)sum(i)X,2, so that their sum can be expressed as (2N)sum(i)X,2. Furthermore, it is the case that = [sum(i)Xi] [sum(j)Xj]. But sum(i)sum(j)XXj = sum(i)Xi, since sum(j)Xj it follows that = [sum(i)X,]2. By substituting sum(i)sum(j)XXj these identities into the preceding equation we obtain sum(i)sum(j) XjXj I i2 - 2[sum(i)X1]2, - [sum(i)X1]2] /(N2)

T = sum(OsumU)PuCii.

(3)

(The value of T is unaffected by the fact that this double summation includes "pairs" consisting of an individual and himself, since C,, = 0.) Our aim now is to derive from the preceding equations the relationship between T, the total relative deprivation in a society, and the Gini index, G, which is a measure of inequality (in this case of wealth) within a society. We begin by noting that in each pair of individuals i and j, only one of the two (the less wealthy) can be relatively deprived with regard to the other. It follows from the definition of Cy that if i is the poorer of the two, Cy =| X,-Xj land Cji = 0. Consequently, the value of the summation in equation (3) would be unaffected were we to let Ci, = Cji = I Xi-Xj 1/2. We can therefore restate equation (3) as iT = (I1/2)sum(i)sum(j)Pij
I Xi -Xj
|

(2N)sum(i)X,2
= 2(N2) Vxj

- 2(N2)[(N)sum(i)X,2

where Vx is the variance of X. We can now incorporate this intermediate result into equation (6) so as to obtain T (K1 /2)sum(i)sum(j) + (K2-Ki)(N2)Vx/R.
{ I Xi-Xi

(7)

The first term on the right side of equation (7) can likewise be simplified. We note that the Gini index is defined as G = sum(i)sumtj)

I Xr-XA

I 1[2(Mx)(N2)]

(4)

where Mx denotes the mean value of X. It follows that (K1 12)sum(i)sum(j) - (Ki)(Mx)(N2)G, I Xi-Xj

By substituting equation (2) into equation (4) we obtain T = (K 12)sum(i)sum(j) I Xi-Xj

+ [(K2-KI)I2]sum(i)sum(j)Dj

Xi-Xj 1. (5)

and therefore that T = (Ki)(Mx)(N2)G + (K2-Ki)(N2)Vx/R. (8)

By now substituting equation (1) into equation (5) we get

T = (Kj/2)sum(i)sum)

I Xi-Xj
XXj 1 2.(6)

= [(K2-K1)/2R]sum(i)sum(j)

To make T independent of the number of individuals in a society, we divide equation (8) by N2 to obtain finally T* = (Ki)(Mx)G + (K2-Kj)Vx/R, (9)

Let us now consider only the expression

This content downloaded on Sat, 16 Mar 2013 08:24:24 AM All use subject to JSTOR Terms and Conditions

326

The AmericanPoliticalScienceReview

Vol. 77

Thus, if X is some asset possessed by individuals in a society, then the total relative deprivation T* in that society with regard to that asset is a rather simple function of the mean of X, its variance, its range, and the Gini index of inequality in its distribution in that society, as well as the parameters K1 and K2. The Form of the Relationship of Relative Deprivation to Inequality In order to determine the form of the relationship between T* and G, it is useful to begin by considering the extreme case of a society in which wealth is distributed equally. This is the only case in which G = 0, and since Vx = 0 as well, it follows from equation (9) that T* = 0. Thus, no matter what the values of K1 and K2, T* = 0 when G = 0. Now let us consider alternative values of the parameters K1 and K2. Recall that K1 is the probability of comparison between two individuals of equal wealth, whereas K2 is the probability of comparison between the richest and poorest persons in the society. We shall here consider only four of the possible pairs of values for these two parameters. First, when K1 = 1 and K2 = 1 comparisons occur between all pairs of individuals, regardless of differences in their wealth. When this is so, T* = (Mx)G, which is the special case discussed by Yitzhaki (1979) and by Hey and Lambert (1980). Second, when K1 = 1 and K2= 0 we have the special case considered by Nagel (1974), in which the probability of comparison between two individuals decreases with the difference in their wealth. Third, when K1 = 0 and K2= 1 we have a case that is just the reverse of Nagel's: the probability of comparison increases with the difference in wealth between two individuals. Finally, we have the trivial case in which K1 = 0 and K2 = 0. Here the probability of comparison is zero for all pairs of individuals, so that T* = 0 for all values of the Gini index. In order to examine more closely the relationship between relative deprivation and economic inequality, the value of G and the values of T* for each of the first three pairs of parameter values were calculated for each of twenty simulated unimodal distributions of wealth.2 These distributions were deliberately constructed so that their means would be negatively correlated (r = -1.0) with G, the Gini index of inequality. Figure 1 shows the relationship between the resulting values of T* (total relative deprivation) and G.

Each of the three plots shown in the figure corresponds to a different pair of values for the parameters K1 and K2. What is striking about these three plots is that each of them is curvilinear. That is, for all three pairs of values for the parameters K1 and K2, relative deprivation is greatest at intermediate levels of inequality and lowest when inequality is either very high or very low. This pattern, here derived theoretically, is the same as the one that Nagel (1974) found empirically in his analysis. It is important to note, however, that the curvilinear relationship obtained for these distributions does not depend on Nagel's assumption that the tendency to compare varies inversely with the difference in wealth between individuals. Instead, we have found that as long as comparison does occur (i.e., as long as at least one of the parameters is positive), the relationship of relative deprivation to inequality is curvilinear no matter what specific values are chosen for K1 and K2. However, the presence of a curvilinear relationship between relative deprivation and inequality is contingent upon a negative correlation between the means of these distributions and their values of G. (That the curves in Figure 1 are nearly symmetrical is likewise dependent upon the means being linearly related to G.) If a different set of twenty unimodal wealth distributions is constructed in which the means are identical, and therefore uncorrelated with G, the relationship of T* to G for alternative values of K1 and K2 is as shown in Figure 2. In this case T* is an almost perfectly linear increasing function of G. Analysis of a third set of twenty distributions in which the means are positively correlated with G (r = + 1.0), produces a result similar to the one in Figure 2, except that the relationship of T* to G is curvilinear upward for all three pairs of parameter values. Note that in that case as well as in Figure 2, when K1 = 1 and K2 = 0 (the parameter values consistent with Nagel's assumptions), the value of T* drops to zero when G reaches its maximum possible value of 1-1 IN. Implications

The results just presented resolve at least some of the disagreement among the four studies described earlier. Assume for the moment that political instability in Russett's (1964) analysis and control by the Viet Cong in Nagel's (1974) study are both positively related to the magnitude of relative deprivation. The results in Figures 1 and 2 show that the curvilinear relationship found by 2A detaileddescriptionof all the simulateddistribu- Nagel and the positive linear relationship of intions used in this articleis availablefrom the authoron stability to inequality found by Russett are not request. necessarily incompatible, since the two studies

This content downloaded on Sat, 16 Mar 2013 08:24:24 AM All use subject to JSTOR Terms and Conditions

1983

Inequality, Social Comparison, and Relative Deprivation

327

had quite different geographic foci. The model presented here implies that both relationships may occur, but under rather different conditions. This may account for some of the difficulty that Nagel (1974, pp. 464-469) experienced in trying to replicate his result with cross-national data. Somewhat more serious are the conflicting apparent implications of the two studies. Whereas Russett's analysis seems to imply that reducing inequality in a society increases its prospect of political stability, Nagel's finding appears to have a more disturbing implication: reducing inequality will reduce political instability only if inequality is already low; if inequality is high, reducing it will increase instability. However, the model and results presented here, which are based on assumptions similar to Nagel's, show this implication to be incorrect. The implications of the model concerning possible strategies for reducing relative deprivation are straightforward. Consider several such policies: (a) Expand the pie additively. Suppose that

policies stimulate economic growth of a sort that increases each person's wealth by some amount h. If Xi' represents the resulting wealth of individual i, then Xi'-Xi + h for every individual i. It follows that Vx'- Vx and R'= R. Furthermore, although inequality will be reduced as a consequence of such policies (i.e., G' < G), mean income will be increased by a like proportion, so that (Mx)G'=(Mx)G. Altogether, then, the new values (Mx)G' and Vx'/R' in equation (9) will be identical to the original values, and total relative deprivation will remain constant. Expanding the pie additively will therefore have no effect on total relative deprivation in a society. (b) Expand the pie multiplicatively. In this case, policies stimulate growth that brings about a proportionate increase in each person's wealth. Specifically, Xi'= hX,. For example, a value of increase in each person's h = 1.1 represents a 1O0%o wealth. In this case Vx= (h2) Vx R'= (h)R, and MX'= (h)Mx, but inequality remains constant (G'= G). Substituting these new values into equation (9) shows that increasing each person's

valuesof K1 andK2, to the GiniIndex,for Alternative of RelativeDeprivation Figure1. Relationship Correlated. whenthe Mean andthe GiniIndexare Negatively

15

o 0

K1, 1, K2.I K =0, K 1

U 12a ~ ~~~~~~1 021 0

OEM
a.

O
03

O A

K1: ItK2=O

9 I0
0 6^

13

O G)
>6

0?

A A

bo

0 ?OO 3
0
0.0
00

02

2
A

0.2

0.4

0.6

0.8

1.0

GINI

This content downloaded on Sat, 16 Mar 2013 08:24:24 AM All use subject to JSTOR Terms and Conditions

328

PoliticalScience Review The American

Vol. 77

Figure 2. Relationship of Relative Deprivation to the Gini Index, for Alternative Values of K1 and K2, when the Mean and the Gini Index are Uncorrelated

0?
>
0._

C 0

55
| 40

13 Kj I =1, K2= 130K1IK2 =

K =0, K21
K1=IK2=O

25
X)
'I

aPC
a
0
~~~~~~0

000

4-

o 10dot
0 0.0

i~o

0.2

0.4

0.6

0.8

1.0

GINI.
wealth by a factor of h will increase total relative deprivation by a factor of h also. If one's aim is to reduce relative deprivation, expanding the pie multiplicatively would appear to be counterproductive. (c) Pure redistribution. The effect on relative deprivation of a redistribution of wealth can be directly inferred from Figure 2, since mean wealth M, is constant for the twenty distributions that served as the basis for that graph. In Figure 2, T* is a monotonically increasing function of G, except for the special case in which G reaches its maximum attainable value. Consequently, redistributing wealth in order to reduce inequality (G) should also reduce total relative deprivation (T*). (d) Policy mixtures. Policies can be pursued that bring about both growth and redistribution. If the relevant policy mixture consists of (a) and (c), then total relative deprivation will be reduced. However, a mixture of policies (b) and (c) will bring about two countervailing effects. To infer the net result requires a more detailed specification of the policies themselves. These inferences must be regarded with considerable caution, for the level of relative deprivation in a society depends not only upon the distribution of wealth in that society but also, the model implies, on the probability that individuals will compare their lot with that of other individuals. In both Figures 1 and 2, as well as in the graph not shown, the magnitude of relative deprivation depends not only on the degree of inequality (G) but also on the values of the parameters K1 and K2. In particular, it is important to note that, for any given value of G, relative deprivation is greatest when K1 = 1 and K2= 1. Consequently, increasing the tendency of individuals to compare their lot with that of other individualsthat is, increasing the value of K1 or K2 toward their maximum value of one-increases the total relative deprivation in a society, even when the distribution of wealth remains unchanged. This implication of the model is consistent with the fact that encouraging social comparisons of income or wealth is a tactic frequently used by political movements to arouse opposition to the existing

This content downloaded on Sat, 16 Mar 2013 08:24:24 AM All use subject to JSTOR Terms and Conditions

1983

Inequality, Social Comparison, and Relative Deprivation

329

institutionsor policiesof a society. More generally,we can infer that if we are to understand the processesthat determinethe level of relativedeprivation in a society,we mustexamine those political, cultural, geographic,and institutional processes that encourage or inhibit social comparisonsamong the membersof that society. To the extent that individualselection determinesthe set of others with whom an individualcompareshis lot, then we needto investigate the criteriaupon which selection is based, which, in addition, may differ substantially among differentcultures.On the other hand, to the extentthat sociallystructured in the variations opportunity to make comparisonsbring about

systematic variation in the probability of comparison, we need to understand more fully the processes that create and constrain these opportunities. For example, it would be useful to study whether or not the development of national and international communication has effectively broadened the range of comparisons that contribute to relative deprivation. Finally, although income and wealth are characteristics concerning which individuals are known to make comparisons, it would be useful to know whether comparisons with respect to other characteristics also contribute to relative deprivation. Further analytical progress depends crucially upon the answers to these important empirical questions.

References
Feld, S. Social structure determinants of similarity among associates. American Sociological Review, 1982, 47, 797-801. Festinger, L. A theory of social comparison processes. Human Relations, 1954, 7, 117-140. Fischer, C. S., Jackson, R. M., Stueve, C. A., Gerson, K., & Jones, L. M. Networks and places. New York: Free Press, 1977. Hey, J. D., & Lambert, P. J. Relative deprivation and the gini coefficient: comment. Quarterly Journal of Economics, 1980, 95, 567-573. Mitchell, E. J. Inequality and insurgency: a statistical study of South Vietnam. World Politics, 1968, 20, 421-438. Nagel, J. H. Inequality and discontent: a nonlinear hypothesis. World Politics, 1974, 26, 453-472. Paige, J. M. Inequality and insurgency in Vietnam: a reanalysis. World Politics, 1970, 23, 24-37. Paranzino, D. Inequality and insurgency in Vietnam: a further reanalysis. World Politics, 1973, 25, 565578. Runciman, W. G. Relative deprivation and social justice. London: Routledge & Kegan Paul, 1966. Russett, B. M. Inequality and instability: the relation of land tenure to politics. World Politics, 1964, 16, 442-454. Russo, A. J., Jr. Economic and social correlates of government control in South Vietnam. In I. K. Feierabend et al. (Eds.) Anger, violence, and politics. Englewood Cliffs, N.J.: Prentice-Hall, 1972. Sansom, R. L. The economics of insurgency in the Mekong Delta in Vietnam. Cambridge, Mass.: MIT Press, 1970. Yitzhaki, S. Relative deprivation and the gini coefficient. Quarterly Journal of Economics, 1979, 93, 321-324.

This content downloaded on Sat, 16 Mar 2013 08:24:24 AM All use subject to JSTOR Terms and Conditions