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Corruption, growth and ethnolinguistic fractionalization: a theoretical model

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  • Roy Cerqueti

    (University of Macerata)

  • Raffaella Coppier

    (University of Macerata)

  • Gustavo Piga

    (University of Rome Tor Vergata)

Abstract

This paper analyzes the existing relationship between ethnolinguistic fractionalization, corruption and the growth rate of a country. We provide a simple theoretical model. We show that a non-linear relationship between fractionalization and corruption exists: corruption is high in homogeneous or very fragmented countries, but low where fractionalization is intermediate. In fact, when ethnic diversity is intermediate, constituencies act as a checkand balance device to limit ethnically-based corruption. Consequently, the relationship between fractionalization and growth rate is also non-linear: growth is high in the�middle range of ethnic diversity, low in homogeneous or very fragmented countries.

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Bibliographic Info

Paper provided by Macerata University, Department of Finance and Economic Sciences in its series Working Papers with number 57-2009.

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Date of creation: Dec 2009
Date of revision: Jan 2010
Handle: RePEc:mcr:wpdief:wpaper00057

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Cited by:
  1. Kanybek Nur-tegin & Hans J. Czap, 2012. "Corruption: Democracy, Autocracy, and Political Stability," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 42(1), pages 51-66, March.

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