Segregation and the Quality of Government in a Cross-Section of Countries

Abstract

This paper has four goals. The first, and perhaps the most important, is to provide a new compilation of data on ethnic, linguistic and religious composition at the sub-national level for a large number of countries. This data set allows us to measure segregation of different ethnic, religious and linguistic groups within the same country. The second goal is to correlate measures of segregation with measures of quality of the polity and policymaking. The third is to construct an instrument that helps to overcome the endogeneity problem that arises both because groups may move within a country in response to policies, and because governments determine the borders of sub-national regions. We find that more ethnically and linguistically segregated countries, i.e., those where groups live more spatially separately, have a substantially lower quality of government. In contrast, we find no relationship between religious segregation and the quality of government. Finally, we provide evidence that trust is an important mediating factor between segregation and the quality of government. Generalized trust is lower in more segregated countries.