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Ethnic diversity, economic performance and civil wars


  • Valsecchi, Michele

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


We develop a conflict model linking dissipation to the distribution of the population over an arbitrary number of groups. We extend the pure contest version of the model by Esteban and Ray (1999) to include a mixed public-private good. We analyze how the level of dissipation changes as the population distribution and the share of publicness of the prize change. First, we find that, in case of pure private goods, the dissipation-distribution relationship resembles the fractionalization index. This may explain the sensitiveness of empirical evidence on the impact of ethnic diversity with respect to outcome (growth, incidence of civil wars) and index (fractionalization, discrete polarization). Second, we find that, in case of pure private goods, smaller groups always contribute more and so the fractionalization index under-estimates their weight. Indeed, we find that the fractionalization index under-estimates the true level of dissipation.

Suggested Citation

  • Valsecchi, Michele, 2010. "Ethnic diversity, economic performance and civil wars," Working Papers in Economics 433, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0433

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    References listed on IDEAS

    1. Campos, Nauro F & Kuzeyev, Vitaliy S., 2007. "On the Dynamics of Ethnic Fractionalization," IZA Discussion Papers 2822, Institute for the Study of Labor (IZA).
    2. Enrico Spolaore & Romain Wacziarg, 2009. "The Diffusion of Development," The Quarterly Journal of Economics, Oxford University Press, vol. 124(2), pages 469-529.
    3. repec:cup:apsrev:v:97:y:2003:i:01:p:75-90_00 is not listed on IDEAS
    4. Esteban, Joan & Ray, Debraj, 1994. "On the Measurement of Polarization," Econometrica, Econometric Society, vol. 62(4), pages 819-851, July.
    5. William Easterly & Ross Levine, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1203-1250.
    6. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(1), pages 222-279, April.
    7. Pelle Ahlerup & Ola Olsson, 2012. "The roots of ethnic diversity," Journal of Economic Growth, Springer, vol. 17(2), pages 71-102, June.
    8. Rohini Pande, 2003. "Can Mandated Political Representation Increase Policy Influence for Disadvantaged Minorities? Theory and Evidence from India," American Economic Review, American Economic Association, vol. 93(4), pages 1132-1151, September.
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    10. 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.
    11. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
    12. Allen McDowell, 2004. "From the help desk: Seemingly unrelated regression with unbalanced equations," Stata Journal, StataCorp LP, vol. 4(4), pages 442-448, December.
    13. Montalvo, Jose G. & Reynal-Querol, Marta, 2005. "Ethnic diversity and economic development," Journal of Development Economics, Elsevier, vol. 76(2), pages 293-323, April.
    14. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
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    Cited by:

    1. Olsson, Ola & Valsecchi, Michele, 2010. "Quantifying Ethnic Cleansing: An Application to Darfur," Working Papers in Economics 479, University of Gothenburg, Department of Economics.

    More about this item


    ethnic diversity; public-private goods; polarization; fractionalization;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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