Dynamic Ethnic Fractionalization and Economic Growth in the Transition Economies from 1989 to 2007

28 Pages Posted: 8 Dec 2009

See all articles by Nauro F. Campos

Nauro F. Campos

University College London; University of Michigan at Ann Arbor - The William Davidson Institute; IZA Institute of Labor Economics

Ahmad Saleh

Brunel University London

Vitaliy S. Kuzeyev

Ak-Bidai Ltd.

Multiple version iconThere are 2 versions of this paper

Abstract

In their survey of the literature on ethnic fractionalization and economic performance, Alesina and La Ferrara (JEL 2005) identify two main directions for future research. One is to improve the measurement of diversity and the other to treat diversity as an endogenous variable. This paper tries to address these two issues: it investigates the effects of ethnic fractionalization on economic growth across countries using unique time-varying measures. We first replicate the finding of a weak effect of exogenous diversity on growth and then we show that accounting for how diversity changes over time and treating it as an endogenous variable makes a difference. Once diversity is instrumented (with lagged diversity and latitude), it shows a significant negative impact on economic growth which is robust to different specifications, polarization measures, econometric estimators, as well as to the use of an index of ethnic-religious-linguistic fractionalization.

Keywords: ethnic diversity, fractionalization, polarization, growth

JEL Classification: O11, Z12, O55, H1

Suggested Citation

Campos, Nauro F. and Saleh, Ahmad and Kuzeyev, Vitaliy S., Dynamic Ethnic Fractionalization and Economic Growth in the Transition Economies from 1989 to 2007. IZA Discussion Paper No. 4597, Available at SSRN: https://ssrn.com/abstract=1519233 or http://dx.doi.org/10.2139/ssrn.1519233

Nauro F. Campos (Contact Author)

University College London ( email )

Gower Street
London, WC1E 6BT
United Kingdom

University of Michigan at Ann Arbor - The William Davidson Institute

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Ahmad Saleh

Brunel University London ( email )

Kingston Lane
Uxbridge, Middlesex UB8 3PH
United Kingdom

Vitaliy S. Kuzeyev

Ak-Bidai Ltd. ( email )

Chehov 103
Kostanai, 110000
Kazakhstan

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
63
Abstract Views
657
Rank
618,039
PlumX Metrics