IDEAS home Printed from https://ideas.repec.org/a/kap/atlecj/v43y2015i3p305-318.html
   My bibliography  Save this article

The Effect of Ethnic Diversity on Municipal Spending

Author

Listed:
  • Jannett Highfill
  • Kevin O’Brien

Abstract

This paper examines the effect of ethnic diversity on municipal spending, taxes, and employment, as well as on municipal spending in various subcategories. Previous work has found that diversity is associated with decreased productive spending but increased overall spending and employment. The goal of this paper is to investigate whether these opposing effects are found for two different levels of diversity. The first considers broad ethnic groups like non-Hispanic white, black, and Hispanic. The second considers more focused diversity, the various subgroups making up the white category. We find that greater broad diversity increases municipal spending and taxes, spending on all of the specific productive goods, and sometimes on protective or redistributive services. Greater focused diversity, on the other hand, decreases municipal spending and spending on one redistributive service but increases spending on another. Copyright International Atlantic Economic Society 2015

Suggested Citation

  • Jannett Highfill & Kevin O’Brien, 2015. "The Effect of Ethnic Diversity on Municipal Spending," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(3), pages 305-318, September.
    • Handle: RePEc:kap:atlecj:v:43:y:2015:i:3:p:305-318
    DOI: 10.1007/s11293-015-9469-z
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11293-015-9469-z
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11293-015-9469-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Alberto Alesina & Eliana La Ferrara, 2000. "Participation in Heterogeneous Communities," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 847-904.
    2. Alesina, Alberto & Baqir, Reza & Easterly, William, 2000. "Redistributive Public Employment," Journal of Urban Economics, Elsevier, vol. 48(2), pages 219-241, September.
    3. repec:hrv:faseco:4553034 is not listed on IDEAS
    4. Alberto Alesina & Reza Baqir & Caroline Hoxby, 2004. "Political Jurisdictions in Heterogeneous Communities," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 348-396, April.
    5. Vigdor, Jacob L., 2002. "Interpreting ethnic fragmentation effects," Economics Letters, Elsevier, vol. 75(2), pages 271-276, April.
    6. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
    7. Alesina, Alberto & La Ferrara, Eliana, 2002. "Who trusts others?," Journal of Public Economics, Elsevier, vol. 85(2), pages 207-234, August.
    8. James M. Poterba, 1997. "Demographic structure and the political economy of public education," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 16(1), pages 48-66.
    9. Olugbenga Ajilore & John Smith, 2011. "Ethnic fragmentation and police spending," Applied Economics Letters, Taylor & Francis Journals, vol. 18(4), pages 329-332.
    10. Olugbenga Ajilore, 2011. "The Impact Of Ethnic Heterogeneity On Education Spending: A Spatial Econometric Analysis Of United States School Districts," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 23(1), pages 66-76, March.
    11. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1243-1284.
    12. Lynn MacDonald, 2008. "The impact of government structure on local public expenditures," Public Choice, Springer, vol. 136(3), pages 457-473, September.
    13. Cutler, David M & Elmendorf, Douglas W & Zeckhauser, Richard J, 1993. "Demographic Characteristics and the Public Bundle," Public Finance = Finances publiques, , vol. 48(Supplemen), pages 178-198.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dimitrova-Grajzl Valentina & Grajzl Peter & Guse A. Joseph & Smith J. Taylor, 2016. "Racial Group Affinity and Religious Giving: Evidence from Congregation-Level Panel Data," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(2), pages 689-725, April.
    2. Andreoni, James & Payne, A. Abigail & Smith, Justin & Karp, David, 2016. "Diversity and donations: The effect of religious and ethnic diversity on charitable giving," Journal of Economic Behavior & Organization, Elsevier, vol. 128(C), pages 47-58.
    3. Stichnoth, Holger & van der Straeten, Karine, 2009. "Ethnic diversity and attitudes towards redistribution: a review of the literature," ZEW Discussion Papers 09-036, ZEW - Leibniz Centre for European Economic Research.
    4. Daniel M. Hungerman, 2008. "Race And Charitable Church Activity," Economic Inquiry, Western Economic Association International, vol. 46(3), pages 380-400, July.
    5. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
    6. Casey, Gregory P. & Owen, Ann L., 2014. "Inequality and Fractionalization," World Development, Elsevier, vol. 56(C), pages 32-50.
    7. Hungerman, Daniel M., 2009. "Crowd-out and diversity," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 729-740, June.
    8. Gerring, John & Thacker, Strom C. & Lu, Yuan & Huang, Wei, 2015. "Does Diversity Impair Human Development? A Multi-Level Test of the Diversity Debit Hypothesis," World Development, Elsevier, vol. 66(C), pages 166-188.
    9. repec:spo:wpmain:info:hdl:2441/30a25e1csn8pqrmbq8oije0o6j is not listed on IDEAS
    10. Yann Algan & Camille Hémet & David D. Laitin, 2016. "The Social Effects of Ethnic Diversity at the Local Level: A Natural Experiment with Exogenous Residential Allocation," Journal of Political Economy, University of Chicago Press, vol. 124(3), pages 696-733.
    11. Alberto Alesina & Caterina Gennaioli & Stefania Lovo, 2019. "Public Goods and Ethnic Diversity: Evidence from Deforestation in Indonesia," Economica, London School of Economics and Political Science, vol. 86(341), pages 32-66, January.
    12. Yann Algan & Camille Hémet & David Laitin, 2012. "The Social Effects of Ethnic Diversity at the Local Level," SciencePo Working papers Main hal-01171148, HAL.
    13. Alberto Alesina & Eliana La Ferrara, 2000. "Participation in Heterogeneous Communities," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 847-904.
    14. Walter Bossert & Conchita D'Ambrosio & Eliana La Ferrara, 2011. "A Generalized Index of Fractionalization," Economica, London School of Economics and Political Science, vol. 78(312), pages 723-750, October.
    15. Algan, Yann & Hémet, Camille & Laitin, David D., 2011. "Diversity and Public Goods: A Natural Experiment with Exogenous Residential Allocation," IZA Discussion Papers 6053, Institute of Labor Economics (IZA).
    16. Guido de Blasio & Alberto Dalmazzo & Monica Andini, 2013. "The Size of Political Jurisdictions: Evidence from a Fascist Consolidation," ERSA conference papers ersa13p276, European Regional Science Association.
    17. Sean Corcoran & William N. Evans, 2010. "Income Inequality, the Median Voter, and the Support for Public Education," NBER Working Papers 16097, National Bureau of Economic Research, Inc.
    18. Daniel M. Hungerman, 2007. "Diversity and Crowd-out: A Theory of Cold-Glow Giving," NBER Working Papers 13348, National Bureau of Economic Research, Inc.
    19. Antecol, Heather & Cobb-Clark, Deborah A., 2010. "The effect of community-level socio-economic conditions on threatening racial encounters," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 517-529, November.
    20. Thomas Kemeny, 2013. "Immigrant Diversity and Economic Development in Cities: A Critical Review," SERC Discussion Papers 0149, Centre for Economic Performance, LSE.
    21. Andini, Monica & Dalmazzo, Alberto & de Blasio, Guido, 2017. "The size of political jurisdictions: A model with some evidence from a fascist consolidation," Journal of Comparative Economics, Elsevier, vol. 45(4), pages 889-909.

    More about this item

    Keywords

    R1; J15; H7; R5; Ethnic heterogeneity; Diversity; Municipal government; Productive government spending; Redistributive government spending;
    All these keywords.

    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:atlecj:v:43:y:2015:i:3:p:305-318. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.