Ethnicity, communication and growth
AbstractIn this paper we consider the link often alleged between ethnic diversity and the growth rate of GDP per capita. We first assume that it is ethnic polarization rather than ethnic fragmentation that is harmful for growth so that the relationship may be nonlinear. Second, we hypothesize that the impact of ethnic diversity on growth may depend on communication costs. This leads us to estimate a traditional growth rate equation on cross sectional data in a switching regression framework. In "low communication costs countries", the relationship between growth and ethnic diversity is U-shaped. On the other hand, in "high communication costs countries", growth is a decreasing function of ethnic diversity and the severity of the latter's deleterious impact is an increasing function of communication costs, proxied here by the illiteracy rate. The regime that a country belongs to is a function of two proxies for communication costs: the illiteracy rate and population density. The impact of ethnic diversity on growth seems not to operate through macroeconomic policy choices. Rather it is a direct transmission mechanism, in which ethnic diversity affects private and public resource allocation, that appears to dominate.
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Bibliographic InfoPaper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2000-20.
Date of creation: 2000
Date of revision:
Other versions of this item:
- Jean-Louis ARCAND & Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY, 1998. "Ethnicity, Communication and Growth," Working Papers 199810, CERDI.
- Jean - Louis Arcand, 2000. "Ethnicity Communication and Growth," Economics Series Working Papers WPS/2000-20, University of Oxford, Department of Economics.
- Jean-Louis ARCAND & Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY, 1999. "Ethnicity, Communication and Growth," Working Papers 199901, CERDI.
- Jean-Louis ARCAND & Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY, 1999. "Ethnicity, Communication and Growth," Working Papers 199922, CERDI.
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