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Fractionalization and Lon-Run Economic Growth: Webs and Direction of Association between the Economic and the Social - South Africa as a Time Series Case Study

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  • Johannes Fedderke
  • John Luiz

Abstract

Recent cross sectional growth studies have found that ethnolinguistic fractionalization is an important explanatory variable of long-run growth performance. In the present paper we follow the call of earlier studies to conduct a more detailed clinical analysis of the growth experience of a specific country. South Africa constitutes an interesting case in which to explore these questions. The results of this study provide important nuance to the existing body of evidence. We find that fractionalization is subject to strong change over time. In addition, we find strong evidence of webs of association between the various social, political and institutional dimensions. Thus various forms of social cleavage tend to go hand in hand which presents the danger of spurious inference of association. Further, the direction of association in the preponderance of cases runs from economic to social, political and institutional variables, rather than the other way around. However, there remain significant impacts from some, but only some fractionalization indexes on economic growth. Which social cleavage, when, how and for what period of time will depend on the historical path of specific societies.

Suggested Citation

  • Johannes Fedderke & John Luiz, 2005. "Fractionalization and Lon-Run Economic Growth: Webs and Direction of Association between the Economic and the Social - South Africa as a Time Series Case Study," Working Papers 22, Economic Research Southern Africa.
  • Handle: RePEc:rza:wpaper:22
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    1. Pesaran, M.H. & Shin, Y., 1995. "An Autoregressive Distributed Lag Modelling Approach to Cointegration Analysis," Cambridge Working Papers in Economics 9514, Faculty of Economics, University of Cambridge.
    2. Pesaran, M. H. & Shin, Y. & Smith, R. J., 1996. "Testing for the 'Existence of a Long-run Relationship'," Cambridge Working Papers in Economics 9622, Faculty of Economics, University of Cambridge.
    3. Alesina, Alberto & Perotti, Roberto, 1996. "Income distribution, political instability, and investment," European Economic Review, Elsevier, vol. 40(6), pages 1203-1228, June.
    4. M. Hashem Pesaran & Yongcheol Shin, 2002. "Long-Run Structural Modelling," Econometric Reviews, Taylor & Francis Journals, vol. 21(1), pages 49-87.
    5. McCleary, Rachel & Barro, Robert, 2003. "Religion and Economic Growth across Countries," Scholarly Articles 3708464, Harvard University Department of Economics.
    6. Robert J. Barro & Rachel McCleary, 2003. "Religion and Economic Growth," NBER Working Papers 9682, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Luiz, John M. & Stephan, Henry, 2012. "The multinationalisation of South African telecommunications firms into Africa," Telecommunications Policy, Elsevier, vol. 36(8), pages 621-635.
    2. John M. Luiz & Henry Stephan, 2011. "Determinants of Foreign Direct Investment of South African Telecommunications Firms into Sub-Saharan Africa," Working Papers 222, Economic Research Southern Africa.
    3. Alexandre Repkine, 2014. "Ethnic Diversity, Political Stability and Productive Efficiency: Empirical Evidence from the African Countries," South African Journal of Economics, Economic Society of South Africa, vol. 82(3), pages 315-333, September.
    4. Philipp Kolo, 2011. "Questioning Ethnic Fragmentation's Exogeneity - Drivers of Changing Ethnic Boundaries," Ibero America Institute for Econ. Research (IAI) Discussion Papers 210, Ibero-America Institute for Economic Research.

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