Discrimination in Developing Countries

In this chapter, we provide an account of the discrimination literature in economics and discuss two widely pursued policies to tackle discrimination in developing countries. We present a discussion of the main classical theories of discrimination: taste-based discrimination and statistical discrimination and extend our discussion to the new and developing literature on norm-based discrimination We briefly discuss the measurement approaches to discrimination and alternative policies to reduce it. We focus on two main policy prescriptions: increasing contact between adversarial groups (the contact hypothesis); and legislating diversity (through affirmative action policies including quotas).