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Evidence from Spatial Correlation of Poverty and Income in Kenya

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  • Hamaguchi, Nobuaki

Abstract

Using the district-level data, we found that even in a relatively poor country like Kenya, ethnic diversity is associated with better economic outcomes at local level. However, we found that income spillovers depend on ethnic similarity. This suggests the influence of ethnic bias through which ethnic diversity may undermine economic efficiency at the national-level, as many crosscountry regressions have pointed out. This result implies, for policy making, that the question of interregional transaction costs cannot be narrowly focused on problems of transportation infrastructure but it is also related with ethnic divisions in African context.

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  • Hamaguchi, Nobuaki, 2011. "Evidence from Spatial Correlation of Poverty and Income in Kenya," Working Papers 35, JICA Research Institute.
    • Handle: RePEc:jic:wpaper:35
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    References listed on IDEAS

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    1. Maarten Bosker & Harry Garretsen, 2012. "Economic Geography and Economic Development in Sub-Saharan Africa," The World Bank Economic Review, World Bank, vol. 26(3), pages 443-485.
    2. Zenou, Yves & Jellal, Mohamed, 2005. "Ethnic Diversity, Market Structure and Risk Sharing in Developing Countries," CEPR Discussion Papers 5366, C.E.P.R. Discussion Papers.
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    5. Gustav Ranis, 2009. "Diversity of Communities and Economic Development: An Overview," Working Papers 977, Economic Growth Center, Yale University.
    6. Ranis, Gustav, 2009. "Diversity of Communities and Economic Development: An Overview," Center Discussion Papers 54531, Yale University, Economic Growth Center.
    7. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
    8. Miguel, Edward & Gugerty, Mary Kay, 2005. "Ethnic diversity, social sanctions, and public goods in Kenya," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2325-2368, December.
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    Keywords

    ethnic bias ; spatial correlation ; regional economy;
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