Contested Unity

Status: Working paper · 2025
Areas: Political economy, Applied game theory

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Abstract

National identity occupies a paradoxical role in society, functioning as both a unifying force and a source of division. This paper develops a dynamic political economy model of identity regime formation, emphasizing interactions among citizen groups and between citizens and the wealthy elite. The framework conceptualizes national identity as the evolving result of intergenerational cultural transmission and intra-societal bargaining over public goods and redistribution. The model incorporates two forms of heterogeneity: ideological divides among citizens in valuing public goods, and income-based stratification between the broader citizenry and a wealthy elite. It shows that when the provision of common goods increases the likelihood of future integration, citizens may paradoxically underinvest in such goods due to imperfect empathy toward future generations. Furthermore, ideologically neutral elite actors may strategically suppress integration to avoid long-term tax burdens, even when short-run integration would reduce their tax rate. The model also generates multiple equilibria, offering a taxonomy of exclusive, multicultural, and integrated identity regimes.