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The Causal Effects of Ethnic Diversity: An Instrumental Variables Approach

  • Ahlerup, Pelle

    ()

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

Ethnic diversity is endogenous to economic development in the long run. Yet the standard approach in economic research is to treat ethnic diversity as an exogenous factor. By identifying instruments for ethnic diversity, we correct this misspeci ca- tion and establish that ethnic diversity has an exogenous in uence on income levels, economic growth, corruption, and provision of public goods. Earlier results based on OLS estimations may have underestimated the negative e¤ects of high levels of ethnic diversity.

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File URL: http://hdl.handle.net/2077/21201
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Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 386.

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Length: 19 pages
Date of creation: 05 Oct 2009
Date of revision:
Handle: RePEc:hhs:gunwpe:0386
Contact details of provider: Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/

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  1. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
  2. Easterly, W & Levine, R, 1996. "Africa's Growth Tragedy : Policies and Ethnic Divisions," Papers 536, Harvard - Institute for International Development.
  3. Angus S. Deaton, 2009. "Instruments of development: Randomization in the tropics, and the search for the elusive keys to economic development," NBER Working Papers 14690, National Bureau of Economic Research, Inc.
  4. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," NBER Working Papers 10568, National Bureau of Economic Research, Inc.
  5. Albouy, David, 2006. "The Colonial Origins of Comparative Development: An Investigation of the Settler Mortality Data," Center for International and Development Economics Research, Working Paper Series qt8kt576x8, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
  6. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
  7. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  8. Ahlerup, Pelle & Olsson, Ola, 2007. "The Roots of Ethnic Diversity," Working Papers in Economics 281, University of Gothenburg, Department of Economics.
  9. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
  10. Fearon, James D, 2003. " Ethnic and Cultural Diversity by Country," Journal of Economic Growth, Springer, vol. 8(2), pages 195-222, June.
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