IDEAS home Printed from https://ideas.repec.org/p/lsu/lsuwpp/2003-011.html
   My bibliography  Save this paper

Why Are Ethnically Divided Countries Poor?

Author

Abstract

Ethnic divisions are associated with poor economic performance. This paper develops a model of ethnic conflict and finds that it is a significant source of poverty. Ethnic divisions lead the government to make ethnic transfers, which distort investment decisions, and lead to civil war because groups fight for control of the government. The simulated model generates the income gap between countries with and without ethnic divisions. Redistribution is the most important source of poverty. War costs cause less than a quarter of the reduction in income and divided countries are poorer even if they do not fight a war.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Benjamin Bridgman, 2003. "Why Are Ethnically Divided Countries Poor?," Departmental Working Papers 2003-011, Department of Economics, Louisiana State University.
    • Handle: RePEc:lsu:lsuwpp:2003-011
    as

    Download full text from publisher

    File URL: https://www.lsu.edu/business/economics/files/workingpapers/pap03_11.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alesina, Alberto & Devleeschauwer, Arnaud & Easterly, William & Kurlat, Sergio & Wacziarg, Romain, 2003. "Fractionalization," Journal of Economic Growth, Springer, vol. 8(2), pages 155-194, June.
    2. Chakrabarti, Subir K., 1999. "Markov Equilibria in Discounted Stochastic Games," Journal of Economic Theory, Elsevier, vol. 85(2), pages 294-327, April.
    3. Ibrahim Elbadawi & Nicholas Sambanis, 2002. "How Much War Will we see?," Journal of Conflict Resolution, Peace Science Society (International), vol. 46(3), pages 307-334, June.
    4. Grossman, Herschel I. & Mendoza, Juan, 2003. "Scarcity and appropriative competition," European Journal of Political Economy, Elsevier, vol. 19(4), pages 747-758, November.
    5. Jean-Paul Azam, 2001. "The Redistributive State and Conflicts in Africa," Journal of Peace Research, Peace Research Institute Oslo, vol. 38(4), pages 429-444, July.
    6. Tangerås, Thomas P. & Lagerlöf, Nils-Petter, 2002. "Ethnic Diversity and Civil War," Working Paper Series 589, Research Institute of Industrial Economics.
    7. Alesina, Alberto & Baqir, Reza & Easterly, William, 2000. "Redistributive Public Employment," Journal of Urban Economics, Elsevier, vol. 48(2), pages 219-241, September.
    8. Frances Stewart & Frank Humphreys & Nick Lea, 1997. "Civil conflict in developing countries over the last quarter of a century: An empirical overview of economic and social consequences," Oxford Development Studies, Taylor & Francis Journals, vol. 25(1), pages 11-41.
    9. Hirshleifer, Jack, 1991. "The Technology of Conflict as an Economic Activity," American Economic Review, American Economic Association, vol. 81(2), pages 130-134, May.
    10. William Easterly & Ross Levine, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1203-1250.
    11. Benjamin Bridgman, 2004. "Multiethnic Democracy," Departmental Working Papers 2004-02, Department of Economics, Louisiana State University.
    12. Fumio Hayashi & Edward C. Prescott, 2004. "The 1990s in Japan: a lost decade," Chapters, in: Paolo Onofri (ed.), The Economics of an Ageing Population, chapter 2, Edward Elgar Publishing.
    13. Jakob Svensson, 2000. "Foreign aid and rent-seeking," Springer Books, in: Roger D. Congleton & Kai A. Konrad & Arye L. Hillman (ed.), 40 Years of Research on Rent Seeking 2, pages 165-189, Springer.
    14. Paul Collier & Anke Hoeffler & Måns Söderbom, 2004. "On the Duration of Civil War," Journal of Peace Research, Peace Research Institute Oslo, vol. 41(3), pages 253-273, May.
    15. Josh Angrist, 2002. "How Do Sex Ratios Affect Marriage and Labor Markets? Evidence from America's Second Generation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 997-1038.
    16. repec:fth:oxesaf:2001-3 is not listed on IDEAS
    17. James A. Robinson & Thierry Verdier, 2013. "The Political Economy of Clientelism," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(2), pages 260-291, April.
    18. Daniel N. Posner, 2004. "Measuring Ethnic Fractionalization in Africa," American Journal of Political Science, John Wiley & Sons, vol. 48(4), pages 849-863, October.
    19. Alberto Alesina, 2002. "The Size of Countries: Does it Matter?," Harvard Institute of Economic Research Working Papers 1975, Harvard - Institute of Economic Research.
    20. Bernheim, B Douglas & Bagwell, Kyle, 1988. "Is Everything Neutral?," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 308-338, April.
    21. Daron Acemoglu & James A. Robinson & Thierry Verdier, 2004. "Alfred Marshall Lecture: Kleptocracy and Divide-and-Rule: A Model of Personal Rule," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 162-192, 04/05.
    22. Todd Sandler, 2000. "Economic Analysis of Conflict," Journal of Conflict Resolution, Peace Science Society (International), vol. 44(6), pages 723-729, December.
    23. 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.
    24. Stergios Skaperdas, 1996. "Contest success functions (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(2), pages 283-290.
    25. Easterly, William, 2001. "Can Institutions Resolve Ethnic Conflict?," Economic Development and Cultural Change, University of Chicago Press, vol. 49(4), pages 687-706, July.
    26. Benhabib, Jess & Rustichini, Aldo, 1996. "Social Conflict and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 125-142, March.
    27. Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-921, September.
    28. Louis Kuijs, 2000. "The Impact of Ethnic Heterogeneityon the Quantity and Quality of Public Spending," IMF Working Papers 2000/049, International Monetary Fund.
    29. Jean-Louis Arcand & Patrick Guillaumont & Sylviane Guillaumont Jeanneney, 2000. "How to make a tragedy: on the alleged effect of ethnicity on growth," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(7), pages 925-938.
    30. Collier, Paul & Hoeffler, Anke, 1998. "On Economic Causes of Civil War," Oxford Economic Papers, Oxford University Press, vol. 50(4), pages 563-573, October.
    31. Esteban, Joan & Ray, Debraj, 1999. "Conflict and Distribution," Journal of Economic Theory, Elsevier, vol. 87(2), pages 379-415, August.
    32. Fafchamps, Marcel, 2000. "Ethnicity and credit in African manufacturing," Journal of Development Economics, Elsevier, vol. 61(1), pages 205-235, February.
    33. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
    34. Montalvo, Jose G. & Reynal-Querol, Marta, 2005. "Ethnic diversity and economic development," Journal of Development Economics, Elsevier, vol. 76(2), pages 293-323, April.
    35. Anthony Annett, 2001. "Social Fractionalization, Political Instability, and the Size of Government," IMF Staff Papers, Palgrave Macmillan, vol. 48(3), pages 1-7.
    36. Alex Ezeh, 1997. "Polygyny and reproductive behavior in sub-saharan Africa: A contextual analysis," Demography, Springer;Population Association of America (PAA), vol. 34(3), pages 355-368, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. John Smith, 2012. "Reputation, Social Identity and Social Conflict," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(4), pages 677-709, August.
    2. Chenchao Jiang & Di Shang & Shixiong Cao, 2016. "Managing Institutional Evolution to Increase the Likelihood of Success: Examples of Guidance from Chinese History," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(3), pages 1157-1167, July.

    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. Bridgman, Benjamin, 2008. "Why are ethnically divided countries poor?," Journal of Macroeconomics, Elsevier, vol. 30(1), pages 1-18, March.
    2. Nauro F. Campos & Vitaliy S. Kuzeyev, 2007. "On the Dynamics of Ethnic Fractionalization," American Journal of Political Science, John Wiley & Sons, vol. 51(3), pages 620-639, July.
    3. 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.
    4. Francesco Caselli & Wilbur John Coleman II, 2013. "On The Theory Of Ethnic Conflict," Journal of the European Economic Association, European Economic Association, vol. 11, pages 161-192, January.
    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. Christopher Blattman & Edward Miguel, 2010. "Civil War," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 3-57, March.
    7. Christopher Blattman, 2009. "Civil War: A Review of Fifty Years of Research," Working Papers id:2231, eSocialSciences.
    8. Pierre PECHER, 2013. "Ethnic conflict, power dynamics and growth," LIDAM Discussion Papers IRES 2014008, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    9. Zhu, Junbing & Grigoriadis, Theocharis N., 2022. "Chinese dialects, culture & economic performance," China Economic Review, Elsevier, vol. 73(C).
    10. Kanbur, Ravi & Rajaram, Prem Kumar & Varshney, Ashutosh, 2011. "Ethnic Diversity and Ethnic Strife. An Interdisciplinary Perspective," World Development, Elsevier, vol. 39(2), pages 147-158, February.
    11. Eris, Mehmet, 2010. "Population heterogeneity and growth," Economic Modelling, Elsevier, vol. 27(5), pages 1211-1222, September.
    12. Indra de Soysa & Eric Neumayer, 2005. "Disarming Fears of Diversity: Ethnic Heterogeneity and State Militarization, 1988–2002," Public Economics 0503008, University Library of Munich, Germany, revised 01 Sep 2005.
    13. 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.
    14. Ager, Philipp & Brückner, Markus, 2013. "Cultural diversity and economic growth: Evidence from the US during the age of mass migration," European Economic Review, Elsevier, vol. 64(C), pages 76-97.
    15. Boakye, Said, 2012. "Theory of social transformation, political transition and economic growth," Economic Systems, Elsevier, vol. 36(3), pages 411-425.
    16. Wunnava, Phanindra V. & Mitra, Aniruddha & Prasch, Robert E., 2012. "Globalization, Institutions, and the Ethnic Divide: Recent Longitudinal Evidence," IZA Discussion Papers 6459, Institute of Labor Economics (IZA).
    17. Ying, Zheng & Liu, Shibao & Bao, Shuming & Zhou, Jianbo, 2017. "Religious diversity and regional development in China," China Economic Review, Elsevier, vol. 46(C), pages 1-9.
    18. Cole, Matthew A. & Elliott, Robert J.R. & Khemmarat, Khemrutai, 2013. "Local exposure to toxic releases: Examining the role of ethnic fractionalization and polarisation," Ecological Economics, Elsevier, vol. 93(C), pages 249-259.
    19. Phanindra V. Wunnava & Aniruddha Mitra & Robert E. Prasch, 2015. "Globalization and the Ethnic Divide: Recent Longitudinal Evidence," Social Science Quarterly, Southwestern Social Science Association, vol. 96(5), pages 1475-1492, November.
    20. Marie-Anne Valfort, 2007. "Containing ethnic conflicts through ethical voting? Evidence from Ethiopia," HiCN Working Papers 35, Households in Conflict Network.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:lsu:lsuwpp:2003-011. 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/delsuus.html .

    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.