Globalization, Institutions, and the Ethnic Divide: Recent Longitudinal Evidence
Phani V. Wunnava
Middlebury College; Institute for the Study of Labor (IZA)
Robert E. Prasch
Middlebury College - Department of Economics; Center for Interuniversity Research and Analysis on Organization (CIRANO)
affiliation not provided to SSRN
IZA Discussion Paper No. 6459
This paper investigates the determinants of economic growth emphasizing the role of institutional quality, social fragmentation, and increasing global integration on recent growth experience. Our longitudinal data consists of 103 countries covering the period 1992-2005. We find that democracies have significantly outperformed autocracies over the sample period and the security of property rights has played a critical role in promoting economic growth. Ethnic heterogeneity has been a significant impediment to growth but religious and linguistic heterogeneity have not. Further, while economic globalization has had a general beneficial impact on economic growth, societies marked by greater ethnic heterogeneity have actually gained more from global integration. This suggests the importance of globalization in redressing the detrimental impact of ethnic cleavages in society (Hegre et al, 2003; Bhagwati, 2004; Mousseau and Mousseau, 2008; Dreher et al, 2008).
Number of Pages in PDF File: 23
Keywords: growth, democracy, property rights, ethnic heterogeneity, globalization
JEL Classification: O47, O43, P14
Date posted: April 14, 2012
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