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Diversity of Communities and Economic Development: An Overview

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  • Ranis, Gustav

Abstract

This paper reviews the literature on the impact of ethnic diversity on economic development. Ethnically polarized societies are less likely to agree on the provision of public goods and more likely to engage in rent seeking activities providing lower levels of social capital. Initial conditions are important determinants of adverse development outcomes. The role of decentralization, democracy and markets as potential remedies are discussed. The paper then presents a number of preliminary hypotheses on the relationship between diversity and instability in order to stimulate future research.

Suggested Citation

  • Ranis, Gustav, 2010. "Diversity of Communities and Economic Development: An Overview," Working Papers 6, JICA Research Institute.
  • Handle: RePEc:jic:wpaper:6
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    References listed on IDEAS

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    1. Besley, Timothy & Kudamatsu, Masayuki, 2007. "Making autocracy work," LSE Research Online Documents on Economics 3764, London School of Economics and Political Science, LSE Library.
    2. Robert H. Bates & Avner Greif & Macatan Humphreys & Smita Singh, 2004. "Institutions and Development," CID Working Papers 107, Center for International Development at Harvard University.
    3. Easterly, William & Kremer, Michael & Pritchett, Lant & Summers, Lawrence H., 1993. "Good policy or good luck?: Country growth performance and temporary shocks," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 459-483, December.
    4. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-548, June.
    5. Brancati, Dawn, 2006. "Decentralization: Fueling the Fire or Dampening the Flames of Ethnic Conflict and Secessionism?," International Organization, Cambridge University Press, vol. 60(03), pages 651-685, July.
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    7. Paul Collier, 1998. "The political economy of ethnicity," CSAE Working Paper Series 1998-08, Centre for the Study of African Economies, University of Oxford.
    8. 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.
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    10. Jan Willem Gunning & Paul Collier, 1999. "Explaining African Economic Performance," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 64-111, March.
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    12. Mwangi S. Kimenyi, 2006. "Ethnicity, Governance and the Provision of Public Goods," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(1), pages 62-99, April.
    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.
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    16. Sachs, Jeffrey D & Warner, Andrew M, 1997. "Sources of Slow Growth in African Economies," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 6(3), pages 335-376, October.
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    Keywords

    Africa ; Diversity ; Economic Growth ; Instability;

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