Does poverty drive prejudice? We study this question in Myanmar, a deeply divided society where anti-Muslim sentiment surged during a partial democratic transition in the mid-2010s. Drawing on theories of economic competition and scapegoating, we test whether material hardship predicts exclusionary attitudes using new data from a nationally representative survey of 22,000 adults belonging to the majority Buddhist group. We find a large and consistent association: both poorer individuals and poorer townships are more likely to express Islamophobia. This relationship persists when leveraging a plausibly exogenous income shock caused by severe flooding. Poverty is more predictive of anti-Muslim sentiment than key alternative explanations for intergroup animus. It also correlates with hostility toward other minorities (Hindus and Indians), indicating that poverty is tied to a more general tendency to denigrate outgroups. Our findings shed light on the economic foundations of polarized social preferences and may help identify communities at heightened risk of ethnoreligious conflict.
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