Economic versus Cultural Differences: Forms of Ethnic Diversity and Public Goods Provision

Abstract

A rguments about how ethnic diversity affects governance typically posit that groups differ from each other in substantively important ways and that these differences make effective governance more difficult. But existing cross-national empirical tests typically use measures of ethnolinguistic fractionalization (ELF) that have no information about substantive differences between groups. This article examines two important ways that groups differ from each other-culturally and economically-and assesses how such differences affect public goods provision. Across 46 countries, the analysis compares existing measures of cultural differences with a new measure that captures economic differences between groups: between-group inequality (BGI). We show that ELF, cultural fractionalization (CF), and BGI measure different things, and that the choice between them has an important impact on our understanding of which countries are most ethnically diverse. Furthermore, empirical tests reveal that BGI has a large, robust, and negative relationship with public goods provision, whereas CF, ELF, and overall inequality do not.

Inequality Between Whom? Patterns, Trends, and Implications of Horizontal Inequality in the Philippines

“…But horizontal inequality is also believed to be important because it has observable adverse consequences. An ever-expanding body of empirical work has documented horizontal or between-group inequality's links with poor social integration (McDoom 2018), public goods under-provision (Baldwin and Huber 2010), democratic instability (Huber and Suryanarayan 2015), economic under-development (Stewart 2002), and with civil war and social conflict more generally (Cederman et al 2013). …”

Horizontal Inequalities and Ethnonationalist Civil War: A Global Comparison

“…Although innovative, our spatial method is limited to territorially segregated groups, and therefore cannot measure nonspatial, economic HI, as in the case of the Hutu and Tutsi in Rwanda. Although survey-based information has limited scope, it could be used to extend and validate our measurements (see Baldwin and Huber 2010).…”

“…Finally, survey 11 For these data, see http://www.measuredhs.com/. 12 See, e.g., Baldwin and Huber (2010), who draw on survey data from 46 countries to evaluate the impact of ethnic diversity on public goods provision. As noted earlier, Østby (2008a, 2008b) also uses survey data in her studies of HIs and conflict in sub-Saharan Africa (see also Østby, Nordås, and Rød 2009). data are subject to a host of potential response biases, both conscious and unconscious.…”

Ethnic fragmentation, public good provision and inequality in India, 1988–2012

“…Political representation of the groups matters as well. In recent papers, Alesina et al (2016);and Baldwin and Huber (2010) show that between group inequality is a better predictor of public good provision and economic performance than other measures of social heterogeneity. This paper is different because unlike the above-mentioned papers it tries to establish a causal relationship between ethnic fragmentation, public good provision and inequality.…”

“…On the positive side inequality may be a natural outcome of the underlying growth process and societies may follow an inverted U-shaped curve of inequality as they grow (Kuznets (1955)). A much more recent literature suggests that rather than overall inequality, conflict and between group tensions are much better captured by measures of between group economic inequality (Alesina et al (2016); Baldwin and Huber (2010)). To the best of our knowledge, this paper makes the first attempt to systematically study between group inequality at a much disaggregated level (districts) and for a much longer sample period in India.…”