IDEAS home Printed from https://ideas.repec.org/a/bla/ecopol/v12y2000i3p225-245.html
   My bibliography  Save this article

Ethnicity, Politics and Economic Performance

Author

Listed:
  • Paul Collier

Abstract

The paper investigates the effects of ethnic diversity on economic performance. Previous studies have found that diversity has various detrimental microeconomic effects, tending to reduce public sector performance, and has large detrimental effects on the overall growth rate. I develop a simple model of the effect of ethnic diversity on a government decision problem in which there is a tradeoff between growth and distribution, in the contexts of democracy and dictatorship. I find that in democracy ethnic diversity has no effect upon the decision, whereas in dictatorship ethnic diversity leads to a government choice which reduces the growth rate. I then test these propositions on two data sets. The first is for 94 countries over the period 1960-1990. I find that whether diversity adversely affects overall economic growth depends upon the political environment. Diversity is highly damaging to growth in the context of limited political rights, but is not damaging in democracies. The second is for World Bank projects in 89 countries. I find that the same relationship between diversity and democracy affects the proportion of projects which are successful. Copyright 2000 Royal Statistical Society.

Suggested Citation

  • Paul Collier, 2000. "Ethnicity, Politics and Economic Performance," Economics and Politics, Wiley Blackwell, vol. 12(3), pages 225-245, November.
  • Handle: RePEc:bla:ecopol:v:12:y:2000:i:3:p:225-245
    as

    Download full text from publisher

    File URL: http://www.blackwell-synergy.com/servlet/useragent?func=synergy&synergyAction=showTOC&journalCode=ecpo&volume=12&issue=3&year=2000&part=null
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, pages 97-109.
    2. Martin C. McGuire & Mancur Olson Jr., 1996. "The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force," Journal of Economic Literature, American Economic Association, pages 72-96.
    3. Rodrik, Dani, 1999. "Where Did All the Growth Go? External Shocks, Social Conflict, and Growth Collapses," Journal of Economic Growth, Springer, vol. 4(4), pages 385-412, December.
    4. Tirole, J., 1993. "The Internal Organization of Government," Working papers 93-11, Massachusetts Institute of Technology (MIT), Department of Economics.
    5. Anderton, Charles H & Anderton, Roxane A & Carter, John R, 1999. "Economic Activity in the Shadow of Conflict," Economic Inquiry, Western Economic Association International, vol. 37(1), pages 166-179, January.
    6. Bester, Helmut & Wärneryd, Karl, 1998. "Conflict Resolution Under Asymmetric Information," SSE/EFI Working Paper Series in Economics and Finance 264, Stockholm School of Economics.
    7. Hirshleifer,Jack, 2001. "The Dark Side of the Force," Cambridge Books, Cambridge University Press, number 9780521009171, December.
    8. Robert Bates & Avner Greif & Smita Singh, 2002. "Organizing Violence," Journal of Conflict Resolution, Peace Science Society (International), pages 599-628.
    9. Albert Breton & Gianluigi Galeotti & Pierre Salmon & Ronald Wintrobe, 1995. "Nationalism and Rationality," Post-Print hal-00445587, HAL.
    10. Shleifer, Andrei & Vishny, Robert W, 1997. " A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
    11. Grossman, Herschel I & Kim, Minseong, 1996. "Predation and Accumulation," Journal of Economic Growth, Springer, vol. 1(3), pages 333-350, September.
    12. repec:hrv:faseco:30728046 is not listed on IDEAS
    13. Gregory D. Hess & Athanasios Orphanides, 2001. "War and Democracy," Journal of Political Economy, University of Chicago Press, vol. 109(4), pages 776-810, August.
    14. Skaperdas, Stergios & Syropoulos, Constantinos, 1996. "Can the shadow of the future harm cooperation?," Journal of Economic Behavior & Organization, Elsevier, pages 355-372.
    15. Skaperdas, S. & Syropoulos, C., 1993. "Gangs as Primitive States," Papers 92-93-02, California Irvine - School of Social Sciences.
    16. Warneryd, Karl, 1998. "Distributional conflict and jurisdictional organization," Journal of Public Economics, Elsevier, pages 435-450.
    17. Usher, Dan, 1989. "The Dynastic Cycle and the Stationary State," American Economic Review, American Economic Association, pages 1031-1044.
    18. Marcouiller, Douglas & Young, Leslie, 1995. "The Black Hole of Graft: The Predatory State and the Informal Economy," American Economic Review, American Economic Association, pages 630-646.
    19. Daron Acemoglu & James A. Robinson, 2000. "Why Did the West Extend the Franchise? Democracy, Inequality, and Growth in Historical Perspective," The Quarterly Journal of Economics, Oxford University Press, pages 1167-1199.
    20. Moselle, Boaz & Polak, Benjamin, 2001. "A Model of a Predatory State," Journal of Law, Economics, and Organization, Oxford University Press, pages 1-33.
    21. Muthoo, Abhinay, 2000. "On the foundations of basic property rights, Part I: A model of the state-of-nature with two players," Economics Discussion Papers 9986, University of Essex, Department of Economics.
    22. Paul Zak, "undated". "Institutions, Property Rights, and Growth," Gruter Institute Working Papers on Law, Economics, and Evolutionary Biology 2-1-1009, Berkeley Electronic Press.
    23. Grossman, Herschel I., 1995. "Robin hood and the redistribution of property income," European Journal of Political Economy, Elsevier, pages 399-410.
    24. Grossman, Herschel I. & Noh, Suk Jae, 1994. "Proprietary public finance and economic welfare," Journal of Public Economics, Elsevier, pages 187-204.
    25. Ronald Findlay, 1990. "THE NEW POLITICAL ECONOMY: ITS EXPLANATORY POWER FOR LDCs," Economics and Politics, Wiley Blackwell, vol. 2(2), pages 193-221, July.
    26. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
    27. Robert H. Bates & Avner Greif & Margaret Levi & Jean-Laurent Rosenthal, 1998. "Analytic Narratives," Economics Books, Princeton University Press, edition 1, number 6355, June.
    28. Robert Bates & Avner Greif & Smita Singh, 2002. "Organizing Violence," Journal of Conflict Resolution, Peace Science Society (International), pages 599-628.
    29. Peguin-Feissolle, A. & Terasvirta, T., 1999. "A General Framework for Testing the Granger Noncausality Hypothesis," G.R.E.Q.A.M. 99a42, Universite Aix-Marseille III.
    30. Mehlum, Halvor & Moene, Karl & Torvik, Ragnar, 2003. "Predator or prey?: Parasitic enterprises in economic development," European Economic Review, Elsevier, pages 275-294.
    31. Lee, J. & Skaperdas, S., 1998. "Workshops or Barracks? Productive versus Enforcive Investment and Economic Performance," Papers 97-98-20, California Irvine - School of Social Sciences.
    32. Mehlum,H. & Moene,K. & Torvik,R., 2000. "Predator or prey? : parasitic enterprises in economic development," Memorandum 27/2000, Oslo University, Department of Economics.
    33. Skaperdas, Stergios, 1996. "Contest Success Functions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 283-290.
    34. Müller, Holger M. & Wärneryd, Karl, 1999. "Inside vs Outside Ownership: A Political Theory of the Firm," SSE/EFI Working Paper Series in Economics and Finance 344, Stockholm School of Economics.
    35. Ronald N. Johnson & Gary D. Libecap, 1994. "The Federal Civil Service System and The Problem of Bureaucracy," NBER Books, National Bureau of Economic Research, Inc, number john94-1.
    36. Helmut Bester & Karl Warneryd, "undated". "Conflict Resolution under Asymmetric Information," Papers 006, Departmental Working Papers.
    37. Samuel Bowles & Herbert Gintis, 1993. "The Revenge of Homo Economicus: Contested Exchange and the Revival of Political Economy," Journal of Economic Perspectives, American Economic Association, pages 83-102.
    38. Howitt, Peter & Wintrobe, Ronald, 1995. "The political economy of inaction," Journal of Public Economics, Elsevier, pages 329-353.
    39. Dan Usher, 1986. "The Dynastic Cycle and the Stationary State," Working Papers 671, Queen's University, Department of Economics.
    40. Skaperdas, Stergios & Syropoulos, Constantinos, 1997. "The Distribution of Income in the Presence of Appropriative Activities," Economica, London School of Economics and Political Science, vol. 64(253), pages 101-117, February.
    41. Marta Reynal-Querol, 2002. "Ethnicity, Political Systems, and Civil Wars," Journal of Conflict Resolution, Peace Science Society (International), pages 29-54.
    42. James E. Anderson & Douglas Marcouiller, 1997. "Trade and Security,I: Anarchy," NBER Working Papers 6223, National Bureau of Economic Research, Inc.
    43. Wintrobe,Ronald, 1998. "The Political Economy of Dictatorship," Cambridge Books, Cambridge University Press, number 9780521583299, December.
    44. Tirole, Jean, 1994. "The Internal Organization of Government," Oxford Economic Papers, Oxford University Press, vol. 46(1), pages 1-29, January.
    45. Garfinkel, M.R. & Skaperdas, S., 2000. "Conflict without Misperceptions or Incomplete Information: how the Future Matters," Papers 99-00-11, California Irvine - School of Social Sciences.
    46. Stergios Skaperdas & Constantinos Syropoulos, 2001. "Guns, Butter, and Openness: On the Relationship between Security and Trade," American Economic Review, American Economic Association, pages 353-357.
    47. Hammond, Peter J & Villar, Antonio, 1998. " Efficiency with Non-convexities: Extending the "Scandinavian Consensus" Approaches," Scandinavian Journal of Economics, Wiley Blackwell, pages 11-32.
    48. Johnson, Ronald N. & Libecap, Gary D., 1994. "The Federal Civil Service System and the Problem of Bureaucracy," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226401713.
    49. Daron Acemoglu & James A. Robinson, 2000. "Why Did the West Extend the Franchise? Democracy, Inequality, and Growth in Historical Perspective," The Quarterly Journal of Economics, Oxford University Press, pages 1167-1199.
    50. Muthoo, Abhinay, 2000. "On the foundations of basic property rights, Part I: A model of the state-of-nature with two players," Economics Discussion Papers 9986, University of Essex, Department of Economics.
    51. Muller, Holger M & Warneryd, Karl, 2001. "Inside versus Outside Ownership: A Political Theory of the Firm," RAND Journal of Economics, The RAND Corporation, pages 527-541.
    52. Blomström, Magnus & Kokko, Ari, 1997. "Regional Integration and Foreign Direct Investment," CEPR Discussion Papers 1659, C.E.P.R. Discussion Papers.
    53. Stergios Skaperdas, 1996. "Contest success functions (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 283-290.
    54. Horowitz, Andrew W, 1993. "Time Paths of Land Reform: A Theoretical Model of Reform Dynamics," American Economic Review, American Economic Association, pages 1003-1010.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecopol:v:12:y:2000:i:3:p:225-245. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0954-1985 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.