In the 1880s and 1890s, Glaeser explains, the southern Populist Party favored large-scale redistribution of wealth from the rich to the poor, and got substantial support from African Americans. "Wealthier Southern conservatives struck back, using race hatred" and spreading untrue stories about atrocities perpetrated by blacks, Glaeser says. " 'Populists are friends of blacks, and blacks are dangerous and hateful,' was the messageâ€”instead of being supported, [blacks] should be sequestered and have their resources reduced. [Rich whites] sold this to poor white voters, winning votes and elections. Eventually the Populists gave in and decided they were better off switching their appeal to poor, racist whites. They felt it was better to switch policies than try to change voters' opinions. The stories--all about rape and murder--were coming from suppliers who were external to poor whites."
Glaeser applies this model to anti-American hatred, which, in degree, "is not particularly correlated with places that the United States has helped or done harm to," he says. "France hates America more than Vietnam does." Instead, he explains, it has much to do with "political entrepreneurs who spread stories about past and future American crimes. Some place may have a leader who has a working relationship with the United States. Enemies of the leader offer an alternative policy: completely break with the United States and Israel, and attack them. We saw it in the religious enemies of the shah [of Iran]. The ayatollah sought to discredit the secular modernists through the use of anti-American hatred."
Here's a paper with the details of the theory. I admit that I'm only half through it and I'm skipping the equations. Still, at least some reasonable conclusions seem to be shaking out from the premises--for example, that hatred is more successfully spread among people who have a high cost of finding out whether the attibuted dangerousness of the out-group is true or not.
Glaeser doesn't seem to cover whether the ingroup profits from hatred. At least in the short run, sometimes it does (many Southern whites with Jim Crow, and I have an impression that South Aftrican whites with apartheid did better than that) and sometimes the ingroup loses ("Aryans" with Nazism--while some of them enriched themselves with stolen Jewish goods, I have the possibly absurd belief that Germany could have stably conquered a lot of territory if it hadn't had a Holocaust--and the purest example I know of for hatred leading to unambiguous loss would be Pol Pot's Cambodia).
At this point, I think bigotry can be analysed on three levels. Individual: hatred is fun and sometimes profitable, and habitual prejudice is work to get rid of, especially if it's socially supported. Small group: hating outsiders holds a group together, and hatred is stabilized by fear of one's intimates and associates--perhaps more than by personal hostility to the outgroup. Large group: individuals can gain advantages by manipulating hatred, theough I get the impression that they also end up personally hating the outgroup.
Link found at Asymetrical Information. There's a lot about defusing and dealing with racism at Steve Barnes' blog, Darkush.