Why Ethnic Fractionalization? Polarization, Ethnic Conflict and Growth

Abstract

This paper is an attempt to clarify the relationship between ethnic fractionalization, polarization and conflict. In recent years many authors have argued that ethnic fractionalization has a negative effect on growth because it increases the likelihood of conflicts. For this reason many growth regressions include the level of ethnic fractionalization as a basic regressor. However the empirical evidence supporting the effect of ethnic fractionalization on the incidence of civil war is very weak. We argue that the index of ethnic fractionalization is not an appropriate measure of potential ethnic conflict. We discuss the intuitive appeal of indices of polarization in the context of conflictive situations. We show that the RQ index of polarization can be derived from a simple rent seeking model and it is the only discrete polarization measure that satisfies the basic properties of polarization. The empirical section shows the importance of the RQ index of polarization in the explanation of the incidence of civil wars.

Keywords: Ethnic heterogeneity, civil wars, economic developement

JEL Classification: O11, Z12, O55