Ethnic Favoritism: An Axiom of Politics?

43 Pages Posted: 27 Jun 2016

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 St. Gallen; University of Oxford; CESifo (Center for Economic Studies and Ifo Institute)

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: June 2016

Abstract

We investigate the prevalence and determinants of ethnic favoritism, i.e., preferential public policies targeted at the political leader's ethnic group. We are the first to study ethnic favoritism in a global sample and to use a broad measure - nighttime light intensity -- that allows capturing the distributive effects of a wide range of policies. We construct two panel datasets with several thousand ethnographic regions from around 140 multi-ethnic countries and annual observations from 1992 to 2013. We find robust evidence for ethnic favoritism: ethnographic regions enjoy 7%-10% more intense nighttime light and 2%-3% higher GDP when being the current political leader's ethnic homeland. We further document that ethnic favoritism is a global phenomenon prevalent both within and outside of Africa; that economic development and better political institutions have at best weak effects on ethnic favoritism; that ethnic favoritism is partly motivated by electoral concerns and extends to linguistically close groups; and that ethnic favoritism does not contribute to sustainable development.

Keywords: elections, Ethnic favoritism, institutions, political leaders

JEL Classification: D72, J15, O43, R11

Suggested Citation

De Luca, Giacomo and Hodler, Roland and Raschky, Paul and Valsecchi, Michele, Ethnic Favoritism: An Axiom of Politics? (June 2016). CEPR Discussion Paper No. DP11351, Available at SSRN: https://ssrn.com/abstract=2801032

Giacomo De Luca (Contact Author)

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

University of St. Gallen ( email )

Varnbuelstr. 14
Saint Gallen, St. Gallen CH-9000
Switzerland

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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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