Ethnic Favoritism: An Axiom of Politics?

35 Pages Posted: 5 Mar 2015

See all articles by Giacomo De Luca

Giacomo De Luca

Free University of Bozen-Bolzano - Free University of Bozen-Bolzano, Faculty of Economics and Management, Students

Roland Hodler

University of Lucerne

Paul Raschky

Monash University - Department of Economics

Michele Valsecchi

University of Gothenburg - School of Business, Economics and Law

Multiple version iconThere are 2 versions of this paper

Date Written: February 26, 2015

Abstract

We investigate the prevalence and determinants of ethnic favoritism, i.e., preferential public policies targeted at the political leader’s ethnic group. We construct a panel dataset of 2,022 ethnographic regions from 139 countries with annual observations from 1992 to 2012, and use nighttime light intensity as output measure to capture the distributive effects of a wide range of policies. We find robust evidence for ethnic favoritism: the political leaders’ ethnographic regions enjoy 10% higher nighttime light intensity. We further find that ethnic favoritism is a global rather than Sub-Saharan African phenomenon, which is present in poor as well as rich countries; that political institutions have a weak effect on ethnic favoritism; that ethnic favoritism is most prevalent in ethnically fractionalized and segregated countries with long established polities; and that ethnic favoritism does not contribute to sustainable development.

Keywords: ethnic favoritism, political leaders, institutions

JEL Classification: D720, R110, J150, O430

Suggested Citation

De Luca, Giacomo and Hodler, Roland and Raschky, Paul and Valsecchi, Michele, Ethnic Favoritism: An Axiom of Politics? (February 26, 2015). CESifo Working Paper Series No. 5209, Available at SSRN: https://ssrn.com/abstract=2573621

Giacomo De Luca

Free University of Bozen-Bolzano - Free University of Bozen-Bolzano, Faculty of Economics and Management, Students ( email )

Via Sernesi 1
Bozen-Bolzano (BZ), 39100
Italy

Roland Hodler (Contact Author)

University of Lucerne ( email )

Hofstrasse 9
P.O. Box 7464
Luzern 7, CH - 6000
Switzerland

Paul Raschky

Monash University - Department of Economics ( email )

Wellington Road
Clayton, Victoria 3
Australia

Michele Valsecchi

University of Gothenburg - School of Business, Economics and Law ( email )

Vasagatan 1
Goteborg, 40530
Sweden

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