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Dynamic Ethnic Fractionalization and Economic Growth


  • Campos, Nauro F.
  • Saleh, Ahmad
  • Kuzeyev, Vitaliy S.


In their survey of the literature on ethnic fractionalization and economic performance, Alesina and La Ferrara (JEL 2005) identify two main directions for future research. One is to improve the measurement of diversity and the other to treat diversity as an endogenous variable. This paper tries to address these two issues. We study the effects of ethnic fractionalization on economic growth using unique time-varying measures across countries, for 26 transition economies from 1989 to 2007. Our main conclusion is that we can replicate the most recent results from the literature and show that static (exogenous) diversity is not robustly related to growth. However, when we account empirically for how ethnic diversity changes over time and treat it as an endogenous variable, our estimates show that it is negatively related to growth an effect which is robust to different estimators, specifications, and fractionalization measures.

Suggested Citation

  • Campos, Nauro F. & Saleh, Ahmad & Kuzeyev, Vitaliy S., 2009. "Dynamic Ethnic Fractionalization and Economic Growth," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 30, Verein für Socialpolitik, Research Committee Development Economics.
  • Handle: RePEc:zbw:gdec09:30

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    Cited by:

    1. Javier Gardeazabal, 2011. "Linguistic polarization and conflict in the Basque Country," Public Choice, Springer, vol. 149(3), pages 405-425, December.
    2. Jülide Yildirim & Nadir Öcal, 2016. "Military expenditures, economic growth and spatial spillovers," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(1), pages 87-104, February.
    3. Samantha Torrance & Oliver Morrissey, "undated". "Taxation and Indigenous Institutions in Sub-Saharan Africa," Discussion Papers 14/04, University of Nottingham, CREDIT.
    4. Elissaios Papyrakis & Pak Hung Mo, 2014. "Fractionalization, Polarization, And Economic Growth: Identifying The Transmission Channels," Economic Inquiry, Western Economic Association International, vol. 52(3), pages 1204-1218, July.
    5. Elissaios Papyrakis, 2013. "Environmental Performance in Socially Fragmented Countries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(1), pages 119-140, May.

    More about this item


    ethnic diversity; fractionalization; polarization; growth;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • H1 - Public Economics - - Structure and Scope of Government


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