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Ethnic conflict, power dynamics and growth

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  • Pierre PECHER

    () (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

I construct a successive generations model of appropriative competition between ethnicities where de facto power puts an upper-bound on the consumption of each clan. My aim is to derive the implications of the structure of the ethnic and political divisions in terms of economic prosperity. I expose a mechanism reducing negative externalities in consumption implying that long-run economic growth is larger when influence is concentrated rather than dispersed. I find that competition intensity sometimes is beneficial if it is above a thresh-old or if small groups initially have a large influence. I provide an argument in favour of the Ethno-Linguistic Fractionalization index over a polarization index when considering the impact of diversity on growth. This paper fills a gap in the literature by allowing for the possibility of more than two groups of different sizes in a dynamical setup and by being consistent with the evidence of proportionality between ethnic and political share sin sub-Saharan Africa.

Suggested Citation

  • Pierre PECHER, 2013. "Ethnic conflict, power dynamics and growth," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2014008, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:2014008
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    File URL: http://sites.uclouvain.be/econ/DP/IRES/2014008.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Economic performance; de facto power dynamics; diversity; ethnic struc-ture; appropriative competition;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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