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Ethnic conflict, power dynamics and growth

  • Pierre PECHER

    ()

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

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    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.

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    File URL: http://sites.uclouvain.be/econ/DP/IRES/2014008.pdf
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    Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2014008.

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    Length: 31
    Date of creation: 21 Dec 2013
    Date of revision:
    Handle: RePEc:ctl:louvir:2014008
    Contact details of provider: Postal: Place Montesquieu 3, 1348 Louvain-la-Neuve (Belgium)
    Fax: +32 10473945
    Web page: http://www.uclouvain.be/ires
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