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Ethnic Heterogeneity and Public Goods Provision in Zambia: Evidence of a Subnational “Diversity Dividend”

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  • Gisselquist, Rachel M.
  • Leiderer, Stefan
  • Niño-Zarazúa, Miguel

Abstract

The “diversity debit” hypothesis – that ethnic diversity has a negative impact on social, economic, and political outcomes – has been widely accepted in the literature. Indeed, with respect to public goods provision – the focus of this article – the conventional wisdom holds that a negative relationship between ethnic heterogeneity and public goods provision is so well-established empirically that future research should abandon examination of whether such a relationship exists and focus instead on why it exists, that is, on the mechanisms underlying a negative relationship. This article challenges the conventional wisdom on empirical grounds. It demonstrates at the sub-national level strong evidence for a “diversity dividend” – that is, a positive relationship between ethnic heterogeneity and some measures of public goods provision, in particular welfare outcomes related to publicly provided goods and services. Building on the literature, the article draws on new analysis at district level for Zambia, using a new dataset compiled by the authors from administrative, budget, and survey data, which cover a broader range of public goods outcomes than previous work, including information on both budgetary and welfare outcomes. The article explores why relationships may differ for sub-national budgetary and welfare outcomes, considering separate models for each. Analysis shows results to be robust across a variety of alternative specifications and models. Given the more nuanced relationship between ethnic diversity and public goods provision documented, the article argues that the key task for future work is not to address why the relationship is negative, but to study under what conditions such direction holds true, and the mechanisms that underlie a diversity dividend. It concludes by considering key explanatory hypotheses against the Zambian data to identify promising areas for such theory development. More broadly, while the diversity debit hypothesis highlights the costs of diversity and could be interpreted as providing support for polices that minimize it, the findings in this article are consistent with a view that diversity can be good for communities, not only for normative reasons, but also because, under some conditions, it can support concrete welfare gains.

Suggested Citation

  • Gisselquist, Rachel M. & Leiderer, Stefan & Niño-Zarazúa, Miguel, 2016. "Ethnic Heterogeneity and Public Goods Provision in Zambia: Evidence of a Subnational “Diversity Dividend”," World Development, Elsevier, vol. 78(C), pages 308-323.
  • Handle: RePEc:eee:wdevel:v:78:y:2016:i:c:p:308-323
    DOI: 10.1016/j.worlddev.2015.10.018
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    Cited by:

    1. Nishant Chadha & Bharti Nandwani, 2017. "Ethnic fragmentation and school provision in India," WIDER Working Paper Series 176, World Institute for Development Economic Research (UNU-WIDER).
    2. repec:eee:wdevel:v:106:y:2018:i:c:p:173-186 is not listed on IDEAS
    3. Christophe Muller, 2016. "Ethnic inequality and community activities in Indonesia," WIDER Working Paper Series 170, World Institute for Development Economic Research (UNU-WIDER).
    4. Christophe Muller, 2017. "Ethnic Horizontal Inequity in Indonesia," Working Papers halshs-01508026, HAL.
    5. repec:eee:wdevel:v:106:y:2018:i:c:p:87-98 is not listed on IDEAS
    6. Bove, Vincenzo & Elia, Leandro, 2017. "Migration, Diversity, and Economic Growth," World Development, Elsevier, vol. 89(C), pages 227-239.
    7. Takaaki Masaki, 2016. "The impact of intergovernmental transfers on local revenue generation in Africa Evidence from Tanzania," WIDER Working Paper Series 113, World Institute for Development Economic Research (UNU-WIDER).
    8. Ivlevs, Artjoms, 2016. "Remittances and Informal Work," IZA Discussion Papers 10196, Institute for the Study of Labor (IZA).
    9. repec:eee:deveco:v:133:y:2018:i:c:p:231-263 is not listed on IDEAS

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