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Why ethnic fractionalization? Polarization, ethnic conflict and growth

This paper ia an attempt to clarify the relationship between fractionalization, polarization and conflict. The literature on the measurement of ethnic diversity has taken as given that the proper measure for heterogeneity can be calculated by using the fractionalization index. This index is widely used in industrial economics and, for empirical purposes, the ethnolinguistic fragmentation is ready available for regression exercises. Nevertheless the adequacy of a synthetic index of hetergeneity depends on the intrinsic characteristics of the heterogeneous dimension to be measured. In the case of ethnic diversity there is a very strong conflictive dimension. For this reason we argue that the measure of heterogeneity should be one of the class of polarization measures. In fact the intuition of the relationship between conflict and fractionalization do not hold for more than two groups. In contrast with the usual problem of polarization indices, which are of difficult empirical implementation without making some arbitrary choice of parameters, we show that the RQ index, proposed by Reynal-Querol (2002), is the only discrete polarization measure that satisfies the basic properties of polarization. Additionally we present a derivation of the RQ index from a simple rent seeking model. In the empirical section we show that while ethnic polarization has a positive effect on civil wars and, indirectly on growth, this effect is not present when we use ethnic fractionalization.

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File URL: http://www.econ.upf.edu/docs/papers/downloads/660.pdf
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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 660.

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Date of creation: Feb 2002
Date of revision: Sep 2002
Handle: RePEc:upf:upfgen:660
Contact details of provider: Web page: http://www.econ.upf.edu/

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  1. Easterly, William & Levine, Ross, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1203-50, November.
  2. Barro, R.J., 1989. "Economic Growth In A Cross Section Of Countries," RCER Working Papers 201, University of Rochester - Center for Economic Research (RCER).
  3. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
  4. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods And Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 114(4), pages 1243-1284, November.
  5. La Ferrara, Eliana & Alesina, Alberto, 2000. "Participation in Heterogeneous Communities," Scholarly Articles 4551796, Harvard University Department of Economics.
  6. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," Journal of Law, Economics and Organization, Oxford University Press, vol. 15(1), pages 222-79, April.
  7. Alberto Alesina & Arnaud Devleeschauwer & William Easterly & Sergio Kurlat & Romain Wacziarg, 2003. "Fractionalization," NBER Working Papers 9411, National Bureau of Economic Research, Inc.
  8. Esteban, J.M. & Ray, D., 1992. "On the Measurement of Polarization," UFAE and IAE Working Papers 171.92, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  9. Bluedorn, John C., 2001. "Can democracy help? Growth and ethnic divisions," Economics Letters, Elsevier, vol. 70(1), pages 121-126, January.
  10. Robert J. Barro, 1996. "Determinants of Economic Growth: A Cross-Country Empirical Study," NBER Working Papers 5698, National Bureau of Economic Research, Inc.
  11. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  12. Alberto Alesina & Eliana La Ferrara, 1999. "Participation in Heterogeneous Communities," NBER Working Papers 7155, National Bureau of Economic Research, Inc.
  13. Vigdor, Jacob L., 2002. "Interpreting ethnic fragmentation effects," Economics Letters, Elsevier, vol. 75(2), pages 271-276, April.
  14. Barro, Robert J & Lee, Jong Wha, 1996. "International Measures of Schooling Years and Schooling Quality," American Economic Review, American Economic Association, vol. 86(2), pages 218-23, May.
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