Income Inequality, Peace and Conflict: Do More Peaceful Countries Face Greater Risks from Rising Inequality?
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Abstract
Income inequality significantly undermines a country’s stability, weakens its peaceful environment, and increases the risk of conflict. Furthermore, the impact of income inequality on peace may be greater in more peaceful countries than in those experiencing lower levels of peace. This proposition is a relatively unexplored area in the literature. This paper examines the impact of income inequality on countries with varying levels of peace. Using panel data spanning 2008 to 2020 for 159 countries, we applied a fixed effects model and panel quantile regression to assess the impact of income inequality on peace and to determine how inequality may affect more and less peaceful countries. We found that higher income inequality, weak rule of law and poor political stability reduce peace within countries. Importantly, we found that more peaceful countries are more adversely affected by increased income inequality, suggesting that they face a greater risk of disruption when income inequality is present. Moreover, the association between income inequality and peace follows a J-curve. Our findings provide policymakers with valuable guidance for designing strategies to reduce income inequality, thereby preserving or enhancing peace and lowering conflict within a country.
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