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Ethnicity, communication and growth

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  • Jean-Louis Arcand
  • Patrick Guillaumont
  • Sylviane Guillaumont Jeanneney

Abstract

In 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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Paper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2000-20.

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Date of creation: 2000
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Handle: RePEc:csa:wpaper:2000-20

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  1. Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY & Jean-Fran├žois BRUN, 1998. "How Instability Lowers African Growth," Working Papers, CERDI 199806, CERDI.
  2. Collier, Paul & Hoeffler, Anke, 1998. "On Economic Causes of Civil War," Oxford Economic Papers, Oxford University Press, Oxford University Press, vol. 50(4), pages 563-73, October.
  3. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(3), pages 681-712, August.
  4. Alesina, A. & Drazen, A., 1991. "Why Are Stabilizations Delayed?," Papers, Tel Aviv - the Sackler Institute of Economic Studies 6-91, Tel Aviv - the Sackler Institute of Economic Studies.
  5. Sachs, Jeffrey D & Warner, Andrew M, 1997. "Sources of Slow Growth in African Economies," Journal of African Economies, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 6(3), pages 335-76, October.
  6. Dani Rodrik, 1998. "Trade Policy and Economic Performance in Sub-Saharan Africa," NBER Working Papers 6562, National Bureau of Economic Research, Inc.
  7. Easterly, W & Levine, R, 1996. "Africa's Growth Tragedy : Policies and Ethnic Divisions," Papers, Harvard - Institute for International Development 536, Harvard - Institute for International Development.
  8. Temple, Jonathan, 1998. "Initial Conditions, Social Capital and Growth in Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 7(3), pages 309-47, October.
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Cited by:
  1. Jean-Louis ARCAND & Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY, 1999. "How To Make A Tragedy: On The Alleged Effect Of Ethnicity On Growth," Working Papers, CERDI 199903, CERDI.
  2. Guillaumont, Patrick, 2008. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) RP2008/99, World Institute for Development Economic Research (UNU-WIDER).
  3. Campos, Nauro F & Kuzeyev, Vitaliy S., 2007. "On the Dynamics of Ethnic Fractionalization," IZA Discussion Papers 2822, Institute for the Study of Labor (IZA).
  4. Mama Ouattara, 2004. "HIV infection and economic growth," Journal of Economic Policy Reform, Taylor & Francis Journals, Taylor & Francis Journals, vol. 7(3), pages 141-149.
  5. Patrick Guillaumont, 2011. "EVI and its Use. Design of an Economic Vulnerability Index and its Use for International Development Policy," Working Papers, HAL halshs-00557091, HAL.
  6. Patrick Guillaumont, 2011. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Working Papers, HAL halshs-00554328, HAL.

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