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The Causal Effects of Ethnic Diversity: An Instrumental Variables Approach

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Author Info

  • Ahlerup, Pelle

    ()
    (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

Ethnic diversity is endogenous to economic development in the long run. Yet the standard approach in economic research is to treat ethnic diversity as an exogenous factor. By identifying instruments for ethnic diversity, we correct this misspeci ca- tion and establish that ethnic diversity has an exogenous in uence on income levels, economic growth, corruption, and provision of public goods. Earlier results based on OLS estimations may have underestimated the negative e¤ects of high levels of ethnic diversity.

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File URL: http://hdl.handle.net/2077/21201
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Bibliographic Info

Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 386.

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Length: 19 pages
Date of creation: 05 Oct 2009
Date of revision:
Handle: RePEc:hhs:gunwpe:0386

Contact details of provider:
Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Keywords: economic development; ethnic diversity; instrumental variables; property rights;

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References

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  1. Angus S. Deaton, 2009. "Instruments of development: Randomization in the tropics, and the search for the elusive keys to economic development," NBER Working Papers 14690, National Bureau of Economic Research, Inc.
  2. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
  3. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
  4. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
  5. David Y. Albouy, 2008. "The Colonial Origins of Comparative Development: An Investigation of the Settler Mortality Data," NBER Working Papers 14130, National Bureau of Economic Research, Inc.
  6. Ahlerup, Pelle & Olsson, Ola, 2007. "The Roots of Ethnic Diversity," Working Papers in Economics 281, University of Gothenburg, Department of Economics.
  7. Easterly, W & Levine, R, 1996. "Africa's Growth Tragedy : Policies and Ethnic Divisions," Papers 536, Harvard - Institute for International Development.
  8. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, 09.
  9. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  10. Fearon, James D, 2003. " Ethnic and Cultural Diversity by Country," Journal of Economic Growth, Springer, vol. 8(2), pages 195-222, June.
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Cited by:
  1. Ahlerup, Pelle & Olsson, Ola, 2007. "The Roots of Ethnic Diversity," Working Papers in Economics 281, University of Gothenburg, Department of Economics.
  2. Mahzab, Moogdho & Atiq, Mohsina & Devdariani, Nino, 2013. "Comparative Analysis of Ethnic Diversity Measures on Provisioning of Basic Public Goods: Cross Country Assessment," MPRA Paper 38511, University Library of Munich, Germany.

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