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Ethnic Distribution, Effective Power and Conflict

  • Matija Kovacic

    ()

    (University Ca’ Foscari Venice)

  • Claudio Zoli

    ()

    (University of Verona)

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    Ethnic heterogeneity can potentially be related to the occurrence of conflicts with longlasting economic effects. Two main measures of ethnic heterogeneity are employed in the econometric literature on ethnic diversity and conflict: the Gini heterogeneity or fractionalization index and the discrete polarization index. However, still no broad consensus is reached on which distributional aspect of ethnic diversity is associated with the outbreak of conflict. In this paper we argue that the relative importance of each pattern of ethnic diversity depends on the trade-off between the groups' power and its interaction with other groups. Following the Esteban and Ray [On the measurement of polarization, Econometrica, 62(4), 1994] approach to social antagonism, we axiomatically derive a parametric class of indices of conflict potential that ombines the groups' effective power and the between-groups interaction. We use a discrete metric to define the distances between groups and we do not treat each group as a unitary actor. Moreover, we assume that the effective power of a group depends not only on its own relative size but also on the relative size of all the other groups in the population. We show that for certain parameter values the obtained indices reduce to the existing indices of ethnic diversity, while in general the derived indices combine in a non-linear way three different aspects of ethnic diversity, namely the fractionalization, the polarization and the ethnic dominance. The power component of the extreme element of the class of indices is given by the relative Penrose-Banzhaf index of voting power. The results from our empirical exercise show that the derived extreme index outperforms the existing indices of ethnic diversity in the explanation of ethnic conflict onset.

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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2013-294.pdf
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    Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 294.

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    Length: 42 pages
    Date of creation: Apr 2013
    Date of revision:
    Handle: RePEc:inq:inqwps:ecineq2013-294
    Contact details of provider: Web page: http://www.ecineq.org
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    1. Fearon, James D, 2003. " Ethnic and Cultural Diversity by Country," Journal of Economic Growth, Springer, vol. 8(2), pages 195-222, June.
    2. Esteban, Joan & Ray, Debraj, 1994. "On the Measurement of Polarization," Econometrica, Econometric Society, vol. 62(4), pages 819-51, July.
    3. Joan Esteban, 2003. "Olson VS. Coase: Coalitional Worth in Conflict," Theory and Decision, Springer, vol. 55(4), pages 339-357, December.
    4. Collier, Paul & Hoeffler, Anke, 1998. "On Economic Causes of Civil War," Oxford Economic Papers, Oxford University Press, vol. 50(4), pages 563-73, October.
    5. Stergios Skaperdas, 1996. "Contest success functions (*)," Economic Theory, Springer, vol. 7(2), pages 283-290.
    6. JoseG. Montalvo & Marta Reynal-Querol, 2008. "Discrete Polarisation with an Application to the Determinants of Genocides," Economic Journal, Royal Economic Society, vol. 118(533), pages 1835-1865, November.
    7. Paul Collier, 2001. "Implications of ethnic diversity," Economic Policy, CEPR;CES;MSH, vol. 16(32), pages 127-166, 04.
    8. Nitzan, Shmuel, 1991. "Collective Rent Dissipation," Economic Journal, Royal Economic Society, vol. 101(409), pages 1522-34, November.
    9. Jose Montalvo & Marta Reynal-Querol, 2010. "Ethnic polarization and the duration of civil wars," Economics of Governance, Springer, vol. 11(2), pages 123-143, April.
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