Social harms - Social cohesion
Image by Raphael Whittle
How can extreme wealth harm social cohesion?
Social cohesion requires shared norms, mutual trust, and a sense of belonging, but extreme wealth can erode these foundations by increasing social distance between groups in society. Extreme wealth concentration can not only increase social divides in terms of physical segregation and more fragmented, unequal services, but it can also amplify status competition, resentment, and perceived unfairness. These dynamics undermine interpersonal trust and weaken identification with a common society. They also reduce confidence in institutions, commitment to a shared social contract and can affect cooperative behaviour increasing risks of conflict and crime.Summary
| Certainty of evidence | Strength of relationship |
|---|---|
Weak - moderate:In relation to social trust and crime, the literature on wealth specifically is extremely limited. However, the extensive research on income inequality identifies strong correlations, especially in cross-sectional studies. There is also strong evidence of the mechanisms linking inequality and lower trust, which are also relevant in relation to extreme wealth: inequality reshapes social relations by making them more competitive, more strained, and less reciprocal, which in turn depresses generalised trust. |
Medium:Inequality has a significant and meaningful effect on social trust but it is not an independent facto that can be isolated from other co-determinants. The evidence points to a stronger negative impact of inequality on trust in high income countries, as in less economically and institutionally developed contexts other structural factors play a greater role. These factors also bear on the relationship between inequality and crime: while consistently associated, the strength of the relationship is heterogenous depending on methods of inquiry used, types of crime and time-frame used. |
No quantification of thresholds, mostly linear analysis
- Institutional quality and governance, including corruption, rule of law, and confidence in public institutions
- Economic development and macroeconomic conditions (e.g. national income levels, economic instability, poverty and economic deprivation, unemployment, and growth trajectories)
- Security and state capacity, including exposure to violence and conflict settings
- Housing policy and housing markets, which shape residential segregation, neighbourhood inequalities, opportunities for cross-group contact
- Historical and demographic factors, including ethnic composition, migration patterns, religious and cultural legacies, and historical trajectories of state formation and social integration
- Evidence on wealth and wealth concentration, as distinct from income inequality, remains extremely limited across both social trust and crime outcomes. In particular, despite indications that measures more sensitive to upper-tail income concentration often predict stronger effects (in relation to both social trust and crime) , more evidence is needed in relation to extreme wealth
- Most studies assume linear relationships; there is limited evidence on thresholds, tipping points, and non-linear effects
- More research is needed on the mechanisms linking extreme wealth to lower trust, including status anxiety, perceptions of unfairness, social fractionalisation, and elite segregation, including on whether extreme wealth has effects that differ qualitatively from broader inequality
Social Trust:
- Barone, G., & Mocetti, S. (2016). Inequality and trust: New evidence from panel data. Economic Inquiry, 54(2), 794-809.
- Han, S. (2025). The erosion of democracy in an age of wealth inequality: Unravelling the impact of subjective socioeconomic stratification. The British Journal of Politics and International Relations, 27(3), 1103-1125.
- Melita, D., Willis, G. B., & Rodríguez-Bailón, R. (2021). Economic inequality increases status anxiety through perceived contextual competitiveness. Frontiers in psychology, 12, 637365.
Crime:
- Pazzona, M. (2024). Revisiting the Income Inequality-Crime Puzzle. World Development, 176, 106520.
- Thornton, A., Bhorat, H., Lilenstein, A., Monnakgotla, J., & van der Zee, K. (2023). Crime, income, and inequality: Nonlinearities under extreme inequality in South Africa. Economic Development and Cultural Change, 72(1), 207-240.
