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Ethnic Diversity and the Efficiency of Public Spending in Developing Countries

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  • Urbain Thierry YOGO

Abstract

This paper examines the effect of ethnic diversity on the efficiency of public spending in a set of developing countries. For this purpose, we use Data Envelopment Analysis to assess the efficiency of public spending in the sectors of health, education and infrastructure in 77 developing countries over the period 1996-2012. Further, we investigate the effect of ethnic diversity on the cross country variation in efficiency. Two main findings emerge. First, barely 12% of the sample of countries under study makes an efficient use of public expenditure. Second, no matters the level of aggregation, ethnic polarization is positively associated with higher efficiency. In contrast, ethnic fractionalization does have a negative or at the best no effect on efficiency, especially at the finest level of disaggregation.

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  • Urbain Thierry YOGO, 2015. "Ethnic Diversity and the Efficiency of Public Spending in Developing Countries," Working Papers 201513, CERDI.
    • Handle: RePEc:cdi:wpaper:1692
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    1. Zhu, Junbing & Grigoriadis, Theocharis, 2020. "Chinese dialects, revolutionary war & economic performance," Discussion Papers 2020/7, Free University Berlin, School of Business & Economics.
    2. Jean-François Brun & Constantin Thierry Compaore, 2021. "Public Expenditures Efficiency On Education Distribution in Developing Countries," Working Papers hal-03116615, HAL.
    3. Jean-François Brun & Constantin Thierry Compaore, 2021. "Public Expenditures Efficiency On Education Distribution in Developing Countries," CERDI Working papers hal-03116615, HAL.

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    More about this item

    Keywords

    Ethnic diversity; Public spending efficiency; Developing countries;
    All these keywords.

    JEL classification:

    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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