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Does ethnic diversity decrease economic interactions? Evidence from exchange networks in rural Gambia


  • Arcand, Jean-Louis
  • Jaimovich, Dany


Using a unique dataset collected in 59 rural Gambian villages, we study how ethnic heterogeneity is related to the structure of four economic exchange networks: land, labor, inputs and credit. We find that different measures of village-level ethnic fragmentation are mostly uncorrelated with network structure. At a more disaggregated level, household heads belonging to ethnic minorities are not less central than those from the predominant ethnicity in any of the networks and, at the dyadic level, the fact that two households share ethnicity is not an economically significant predictor of link formation. Our results indicate that, in the particular setting of our study, the structure of the exchange networks is better defined by other variables than ethnicity, and that ethnic heterogeneity is unlikely to be a driver for sub-optimal economic exchanges. We argue that our findings can be interpreted in a causal way as the current distribution of ethnic groups in rural Gambia is largely influenced by specific historical features of the British colonial administration. Moreover, the network structure of our data allow us to include fixed effects at different levels as well as to precisely measure kinship ties, a confounding variable often omitted in previous studies.

Suggested Citation

  • Arcand, Jean-Louis & Jaimovich, Dany, 2014. "Does ethnic diversity decrease economic interactions? Evidence from exchange networks in rural Gambia," MPRA Paper 60497, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:60497

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    References listed on IDEAS

    1. Fafchamps Marcel, 2003. "Ethnicity and Networks in African Trade," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 2(1), pages 1-53, December.
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    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Does ethnic diversity decrease economic interactions? Evidence from exchange networks in rural Gambia
      by Dany Jaimovich - Bakary Baludin in Development Therapy on 2014-12-19 01:56:00
    2. Papers using the Gambia Networks Data 2009
      by Dany Jaimovich - Bakary Baludin in Development Therapy on 2015-04-21 19:27:00


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    Cited by:

    1. Irene van Staveren & Zahid Pervaiz, 2017. "Is it Ethnic Fractionalization or Social Exclusion, Which Affects Social Cohesion?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 130(2), pages 711-731, January.
    2. Beck, Ulrik & Bjerge, Benedikte & Fafchamps, Marcel, 2015. "Social Ties and the Efficiency of Factor Transfers," CEPR Discussion Papers 10957, C.E.P.R. Discussion Papers.

    More about this item


    Keywords: West Africa; Social Networks; Ethnic Fragmentation. JEL codes: C31; D04; 012; Z13.;

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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