Ethnic Diversity + Economic Performance - Alberto Alesina & Elaina La Ferrara Flashcards
Pros of diversity
variety of abilities, experiences, and cultures –> productivity; ethnic diversity can be beneficial at higher levels of development
Cons of diversity
conflict of preferences, racism, prejudice
Fractionalization
the degree to which a society is diverse
Diversity & economic choices
directly affects individual preferences
Diversity & economic outcomes
influences the strategies of individuals
Pros of heterogeneity
variety in production
Cons of heterogeneity
inability to agree on common public goods and policies
Growth in racially fragmented countries
ceteris paribus, more racially fragmented countries grow less (this is a major determinant of Africa’s poor economic performance)
Ethno-linguistic Fractionalization
represents the probability that two randomly drawn individuals from the population belong to different ethnic groups
Fractionalization & income
fractionalization has more negative effects at lower income levels and less negative effects on democracies (democracies tend to be richer)
Negative correlations with ethnic fragmentation
ethnic fragmentation is negatively correlated with measures of infrastructure quality, literacy, and school attainment
Positive correlations with ethnic fragmentation
ethnic fragmentation is positively correlated with infant mortality
Reasons for separation of larger populations
availability of new natural resources are often rural, sparking economic viability and increasing pressure for separation and autonomy
Consociational democracy
Lijphart’s idea that democracy should be a coalition government in which “all significant segments of the plural society” are represented, with a proportionality system, a mutual veto, and a federalist structure
When will different groups almost always work together?
when there is an external threat
