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Ethnicity, Communication and Growth

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Listed:
  • Jean-Louis ARCAND
  • Patrick GUILLAUMONT

    (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • Sylviane GUILLAUMONT JEANNENEY

    (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

Abstract

In this paper we consider the link often alleged between ethnic diversity and the growth rate of GDP per capita. We first assume that it is ethnic polarization rather than ethnic fragmentation that is harmful for growth so that the relationship may be non-linear. Second, we hypothesize that the impact of ethnic diversity on growth may depend on communication costs. This leads us to estimate a traditional growth rate equation on cross sectional data in a switching regression framework. In "low communication costs countries", the relationship between growth and ethnic diversity is U-shaped. On the other hand, in "high communication costs countries", growth is a decreasing function of ethnic diversity and the severity of the latter's deleterious impact is an increasing function of communication costs, proxied here by the illiteracy rate. The regime that a country belongs to is a function of two proxies for communication costs: the illiteracy rate and population density. The impact of ethnic diversity on growth seems not to operate through macroeconomic policy choices. Rather it is a direct transmission mechanism, in which ethnic diversity affects private and public ressource allocation, that appears to dominate.

Suggested Citation

  • Jean-Louis ARCAND & Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY, 1999. "Ethnicity, Communication and Growth," Working Papers 199901, CERDI.
    • Handle: RePEc:cdi:wpaper:100
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    References listed on IDEAS

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    1. Guillaumont, Patrick & Jeanneney, Sylviane Guillaumont & Brun, Jean-Francois, 1999. "How Instability Lowers African Growth," Journal of African Economies, Centre for the Study of African Economies, vol. 8(1), pages 87-107, March.
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    6. Jan Willem Gunning & Paul Collier, 1999. "Explaining African Economic Performance," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 64-111, March.
    7. Dani Rodrik, 1998. "Trade Policy and Economic Performance in Sub-Saharan Africa," NBER Working Papers 6562, National Bureau of Economic Research, Inc.
    8. Paul Collier, 1998. "The political economy of ethnicity," Economics Series Working Papers WPS/1998-08, University of Oxford, Department of Economics.
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    Cited by:

    1. Patrick Guillaumont, 2009. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Oxford Development Studies, Taylor & Francis Journals, vol. 37(3), pages 193-228.
    2. Nauro F. Campos & Vitaliy S. Kuzeyev, 2007. "On the Dynamics of Ethnic Fractionalization," American Journal of Political Science, John Wiley & Sons, vol. 51(3), pages 620-639, July.
    3. Patrick GUILLAUMONT, 2007. "EVI and its Use. Design of an Economic Vulnerability Index and its Use for International Development Policy," Working Papers 200714, CERDI.
    4. Mama Ouattara, 2004. "HIV infection and economic growth," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 7(3), pages 141-149.
    5. Jacky AMPROU, 2003. "Interest Groups and Demand for IMF Arrangements: Empirical Analysis of the Duration of Periods without Agreement between the IMF and Sub-Saharan African Countries," Working Papers 200301, CERDI.
    6. Jean-Louis Arcand & Patrick Guillaumont & Sylviane Guillaumont Jeanneney, 2000. "How to make a tragedy: on the alleged effect of ethnicity on growth," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(7), pages 925-938.

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