Competition

Subproject “Competition” investigates within the framework of the beliefs-externalities-legitimacy (BEL) framework how rising inequality of opportunity in economic competition (externalities) in the wake of globalization and technological change (driver) threatens the legitimacy of the democratic regime (conflict-escalation hypothesis). In particular, we hypothesize that globalization and technological progress increase inequality (of incomes and opportunity) and the extent of competition for prestigious education, jobs, and positions, thereby threatening the legitimacy of the institutions that shape this competition and initiating potentially disruptive BISC. To illustrate, globalization and skill-biased technological change have resulted in low-skilled workers becoming cheaper in industrialized Western countries. Low-skilled workers have become worse off as competition increased and their real wages declined, while high-income workers have benefited from globalization with higher wages and cheaper consumer goods. As a result, upward social mobility has suffered. In response to such externalities, people may change their beliefs about the causes of inequality and lack of mobility, and in particular, the reasons for their own position within a society. We conjecture that these forces may generate large-scale discontent and undermine the legitimacy of core institutions in a liberal democracy. We focus on institutions that regulate competition for income through voting and examine the extent to which people change their attitudes toward these institutions when the privileged resist leveling the playing field. We hypothesize that such resistance leads to escalating conflicts between the winners and losers of the prevailing regime and an erosion of the legitimacy of the respective institutions. The change of the societal structure will be disruptive if the privileged do not reduce their resistance and the institution that sustains the voting equilibrium is no longer viewed as being legitimate. Overall, "Competition" will provide a better understanding of the relationship between economic competition among the members of the society, the format of this competition (e.g., whether it is inclusive or entails highly unequal opportunities), and disruptive societal change.