  Heider's balance theory emphasizes cognitive consistency in assessing others,
as is expressed by ``The enemy of my enemy is my friend.'' At the same time,
the theory of indirect reciprocity provides us with a dynamical framework to
study how to assess others based on their actions as well as how to act toward
them based on the assessments. Well-known are the `leading eight' from L1 to
L8, the eight norms for assessment and action to foster cooperation in social
dilemmas while resisting the invasion of mutant norms prescribing alternative
actions. In this work, we begin by showing that balance is equivalent to
stationarity of dynamics only for L4 and L6 (Stern Judging) among the leading
eight. Stern Judging reflects an intuitive idea that good merits reward whereas
evil warrants punishment. By analyzing the dynamics of Stern Judging in
complete graphs, we prove that this norm almost always segregates the graph
into two mutually hostile groups as the graph size grows. We then compare L4
with Stern Judging: The only difference of L4 is that a good player's
cooperative action toward a bad one is regarded as good. This subtle difference
transforms large populations governed by L4 to a ``paradise'' where cooperation
prevails and positive assessments abound. Our study thus helps us understand
the relationship between individual norms and their emergent consequences at a
population level, shedding light on the nuanced interplay between cognitive
consistency and segregation dynamics.
