Dynamic Ethnic Fractionalization and Economic Growth in the Transition Economies from 1989 to 2007
AbstractIn their survey of the literature on ethnic fractionalization and economic performance, Alesina and La Ferrara (JEL 2005) identify two main directions for future research. One is to improve the measurement of diversity and the other to treat diversity as an endogenous variable. This paper tries to address these two issues: it investigates the effects of ethnic fractionalization on economic growth across countries using unique time-varying measures. We first replicate the finding of a weak effect of exogenous diversity on growth and then we show that accounting for how diversity changes over time and treating it as an endogenous variable makes a difference. Once diversity is instrumented (with lagged diversity and latitude), it shows a significant negative impact on economic growth which is robust to different specifications, polarization measures, econometric estimators, as well as to the use of an index of ethnic-religious-linguistic fractionalization.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4597.
Length: 28 pages
Date of creation: Nov 2009
Date of revision:
Publication status: published in: Journal of International Trade and Economic Development, 2011, 20 (2),129-152
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Other versions of this item:
- Campos, Nauro F. & Kuzeyev, Vitaliy & Saleh, Ahmad, 2009. "Dynamic Ethnic Fractionalization and Economic Growth in the Transition Economies from 1989 to 2007," CEPR Discussion Papers 7586, C.E.P.R. Discussion Papers.
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- Z12 - Other Special Topics - - Cultural Economics - - - Religion
- O55 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Africa
- H1 - Public Economics - - Structure and Scope of Government
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-12-11 (All new papers)
- NEP-DEV-2009-12-11 (Development)
- NEP-FDG-2009-12-11 (Financial Development & Growth)
- NEP-TRA-2009-12-11 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rachel M. McCleary & Robert J. Barro, 2006. "Religion and Economy," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 49-72, Spring.
- Bluedorn, John C., 2001. "Can democracy help? Growth and ethnic divisions," Economics Letters, Elsevier, vol. 70(1), pages 121-126, January.
- Campos, Nauro F & Coricelli, Fabrizio, 2002.
"Growth in Transition: What we Know, What we Don't and What we Should,"
CEPR Discussion Papers
3246, C.E.P.R. Discussion Papers.
- Nauro F. Campos & Abrizio Coricelli, 2002. "Growth in Transition: What We Know, What We Don't, and What We Should," Journal of Economic Literature, American Economic Association, vol. 40(3), pages 793-836, September.
- Nauro F. Campos & Fabrizio Coricelli, 2002. "Growth in Transition: What We Know, What We Don't, and What We Should," William Davidson Institute Working Papers Series 470, William Davidson Institute at the University of Michigan.
- Woo, Jaejoon, 2003. "Social polarization, industrialization, and fiscal instability: theory and evidence," Journal of Development Economics, Elsevier, vol. 72(1), pages 223-252, October.
- Alesina, Alberto & La Ferrara, Eliana, 2005. "Ethnic Diversity and Economic Performance," Scholarly Articles 4553005, Harvard University Department of Economics.
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