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Why Does Ethnic Diversity Undermine Public Goods Provision? An Experimental Approach

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Author Info
James Habyarimana () (Georgetown University and IZA Bonn)
Macartan Humphreys () (Columbia University)
Daniel N. Posner () (University of California, Los Angeles)
Jeremy Weinstein () (Stanford University)

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Abstract

A large and growing literature links high levels of ethnic diversity to low levels of public goods provision. Yet while the empirical connection between ethnic heterogeneity and the underprovision of public goods is widely accepted, there is little consensus on the specific mechanisms through which this relationship operates. To gain analytic leverage on the question of why ethnicity matters, we identify three families of mechanisms – what we term preference, technology, and strategy mechanisms. Our empirical strategy is to identify and run a series of experimental games that permit us to examine these mechanisms in isolation and then to compare the importance of ethnicity in each. Results from experimental games conducted with a random sample of 300 subjects in Kampala’s slums reveal that successful collective action among homogenous ethnic communities in urban Uganda is attributable to the existence of norms and institutions that facilitate the sanctioning of non-contributors. We find no evidence for a commonality of tastes within ethnic groups, for greater degrees of altruism toward co-ethnics, or for an impact of shared ethnicity on the productivity of teams.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2272.

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Length: 38 pages
Date of creation: Aug 2006
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Handle: RePEc:iza:izadps:dp2272

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Related research
Keywords: ethnic diversity; collective action; public goods; field experiments;

Find related papers by JEL classification:
D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities and Races; Non-labor Discrimination
O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

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  1. Claudia Senik & Holger Stichnoth & Karine Van der Straeten, 2008. "Immigration and natives' attitudes towards the welfare state: Evidence from the European Social Survey," PSE Working Papers 2008-43, PSE (Ecole normale supérieure). [Downloadable!]
  2. Lindqvist, Erik & Östling, Robert, 2006. "Identity and Redistribution," Working Paper Series in Economics and Finance 659, Stockholm School of Economics, revised 12 Jun 2007. [Downloadable!]
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