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Linguistic Diversity and Redistribution

  • Klaus Desmet

    ()

    (Universidad Carlos III, Getafe (Madrid), Spain, and CEPR)

  • Ignacio Ortuno-Ortin

    ()

    (Universidad Carlos III, Getafe (Madrid), Spain)

  • Shlomo Weber

    ()

    (Southern Methodist University, Dallas, USA, CORE, Catholic University of Louvain, Louvain-la-Neuve, Belgium, and CEPR)

This paper investigates the effect of linguistic diversity on redistribution in a broad cross-section of countries. We use the notion of "linguistic distances" and show that the commonly used fractionalization index, which ignores linguistic distances, yields insignificant results. However, once distances between languages are accounted for, linguistic diversity has both a statistically and economically significant effect on redistribution. With an average level of redistribution of 9.5% of GDP in our data set, an increase by one standard deviation in the degree of diversity lowers redistribution by approximately one percentage point. We also demonstrate that other measures, such as polarization and peripheral heterogeneity, provide similar results when linguistic distances are incorporated.

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Paper provided by International School of Economics at TSU, Tbilisi, Republic of Georgia in its series Working Papers with number 004-08.

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Length: 34 pages
Date of creation: Jul 2008
Date of revision:
Handle: RePEc:tbs:wpaper:08-004
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  1. Wacziarg, Romain & Spolaore, Enrico, 2006. "The Diffusion of Development," Research Papers 1898r1, Stanford University, Graduate School of Business.
  2. Victor Ginsburgh & Ignacio Ortuño-Ortín & Shlomo Weber, 2005. "Disenfranchisement In Linguistically Diverse Societies: The Case Of The European Union," Journal of the European Economic Association, MIT Press, vol. 3(4), pages 946-965, 06.
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  5. DESMET, Klaus & ORTUNO-ORTIN, Ignacio & WEBER, Shlomo, 2005. "Peripheral diversity and redistribution," CORE Discussion Papers 2005044, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  9. Lee, Woojin & Roemer, John E., 2006. "Racism and redistribution in the United States: A solution to the problem of American exceptionalism," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1027-1052, August.
  10. Caselli, Francesco & Coleman II, Wilbur John, 2006. "On the Theory of Ethnic Conflict," CEPR Discussion Papers 5622, C.E.P.R. Discussion Papers.
  11. José Garcia Montalvo & Marta Reynal-Querol, 2002. "Why ethnic fractionalization? Polarization, ethnic conflict and growth," Economics Working Papers 660, Department of Economics and Business, Universitat Pompeu Fabra, revised Sep 2002.
  12. Jean-Yves Duclos & Joan Esteban & Debraj Ray, 2004. "Polarization: Concepts, Measurement, Estimation," Econometrica, Econometric Society, vol. 72(6), pages 1737-1772, November.
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  14. Erzo F.P. Luttmer, 1999. "Group Loyalty and the Taste for Redistribution," Working Papers 9902, Harris School of Public Policy Studies, University of Chicago.
  15. Baqir, Reza & Easterly, William & Alesina, Alberto, 1999. "Public Goods and Ethnic Divisions," Scholarly Articles 4551797, Harvard University Department of Economics.
  16. Lind, Jo Thori, 2003. "Fractionalization and the size of government," Memorandum 21/2003, Oslo University, Department of Economics.
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