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Ethnicity, Communication and Growth

  • 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))

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.

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File URL: http://publi.cerdi.org/ed/1998/1998.10.pdf
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Paper provided by CERDI in its series Working Papers with number 199810.

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Length: 22
Date of creation: 1998
Date of revision:
Handle: RePEc:cdi:wpaper:78
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  1. Alesina, Alberto & Drazen, Allan, 1991. "Why Are Stabilizations Delayed?," American Economic Review, American Economic Association, vol. 81(5), pages 1170-88, December.
  2. Collier, Paul & Hoeffler, Anke, 1998. "On Economic Causes of Civil War," Oxford Economic Papers, Oxford University Press, vol. 50(4), pages 563-73, October.
  3. Easterly, William & Levine, Ross, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1203-50, November.
  4. Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY & Jean-François BRUN, 1997. "How Instability Lowers African Growth ?," Working Papers 199712, CERDI.
  5. Sachs, Jeffrey D & Warner, Andrew M, 1997. "Sources of Slow Growth in African Economies," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 6(3), pages 335-76, October.
  6. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  7. Temple, Jonathan, 1998. "Initial Conditions, Social Capital and Growth in Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 7(3), pages 309-47, October.
  8. Dani Rodrik, 1998. "Trade Policy and Economic Performance in Sub-Saharan Africa," NBER Working Papers 6562, National Bureau of Economic Research, Inc.
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