The Geography of Linguistic Diversity and the Provision of Public Goods

Abstract

This paper theoretically analyzes and empirically investigates the importance of local interaction between individuals of different linguistic groups for the provision of public goods at the national level. Depending on whether local interaction mitigates or reinforces antagonism towards other groups, the micro-founded theory we develop predicts that a country's provision of public goods (i) decreases in its overall linguistic fractionalization, and (ii) either increases or decreases in how much individuals locally learn about other groups. After constructing a 5 km by 5 km geographic dataset on language use for 223 countries, we compute measures of overall fractionalization and local learning, and investigate their relation to public good provision at the country level. While overall fractionalization worsens outcomes, we find a positive causal relation between local learning and public goods. Local mixing therefore mitigates the negative impact of a country's overall linguistic fractionalization. An IV strategy shows that this result is not driven by the possible endogenous spatial distribution of language speakers within countries.

The Political Boundaries of Ethnic Divisions

“…Finally, our results suggest that the growing number of studies exploiting subnational variation in diversity should use spatial boundaries at levels of aggregation that are outcome-relevant. This echoes recent work arguing that local diversity can have different effects than diversity at the aggregate, country level given the different nature of interaction within and between jurisdictions (Alesina and Zhuravskaya 2011;Desmet, Gomes, and Ortuño-Ortín 2016;Montalvo and Reynal-Querol, forthcoming).…”

Measuring urban economic density

“…Our primary data source is LandScan (2012) from Oak Ridge National Laboratory in the USA, which is now being used in some research (e.g. Desmet et al (2018)). Oak Ridge takes population data from censuses and other sources worldwide on as fine a spatial scale for each country as they can obtain.…”

Linguistic Distance and Market Integration in India

“…Linguistic distance may also make it more difficult to acquire a language in which trade is conducted or to acquire common levels of education; Isphording and Otten (2014), Jain (2017), Laitin and Ramachandran (2016), and Shastry (2012) all find evidence that the costs of acquiring a new language -or education provided in that new language -are higher for those whose mother tongue is more dissimilar to the new language. Finally, linguistic distance may proxy for differences in preferences over public goods, redistribution, and the provision of infrastructure (Desmet et al, 2020(Desmet et al, , 2012(Desmet et al, , 2017. If these public goods and infrastructure investments affect trade costs, they may help explain our main result.…”

“…They may work through costs of language or education acquisition (Isphording and Otten, 2014;Jain, 2017;Laitin and Ramachandran, 2016;Shastry, 2012). They may correlate with common preferences for public goods, redistribution, and infrastructure (Desmet et al, 2020(Desmet et al, , 2012(Desmet et al, , 2017.…”