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Ethnic Favoritism: An Axiom of Politics?

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  • Hodler, Roland
  • De Luca, Giacomo
  • Raschky, Paul
  • ,

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.

Suggested Citation

  • Hodler, Roland & De Luca, Giacomo & Raschky, Paul & ,, 2016. "Ethnic Favoritism: An Axiom of Politics?," CEPR Discussion Papers 11351, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:11351
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    More about this item

    Keywords

    Ethnic favoritism; Political leaders; Institutions; Elections;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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