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Ethnic Identities, Public Spending and Political Regimes

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  • Sugata Ghosh
  • Anirban Mitra

Abstract

Do democracies discriminate less against minorities as compared to non-democracies? How does the dominance of an ethnic group affect discrimination under various political regimes? We build a theory which tries to answer such questions. In our model, political leaders (democratically elected or not) decide on the allocation of spending on different types of public goods: a general public good and an ethnically-targetable public good which benefits the majority ethnic group while imposing a cost on the other minorities. We show that, under democracy, lower ethnic dominance leads to greater provision of the general public good while higher dominance implies higher provision of the ethnically-targetable good. Interestingly, the opposite relation obtains under dictatorship. This implies that political regime changes can favour or disfavour minorities based on the ambient level of ethnic dominance. Several historical events involving regime changes can be analysed within our framework and are consistent with our results.

Suggested Citation

  • Sugata Ghosh & Anirban Mitra, 2019. "Ethnic Identities, Public Spending and Political Regimes," Studies in Economics 1907, School of Economics, University of Kent.
  • Handle: RePEc:ukc:ukcedp:1907
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    More about this item

    Keywords

    Ethnic identities; Discrimination; Public spending; Political regimes;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H40 - Public Economics - - Publicly Provided Goods - - - General

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