with Ahmad Saleh and Vitaliy Kuzeyev
Published in the Journal of International Trade and Economic Development 20: 2, 129 — 152 (2001) [ PDF ]
In their survey of the literature on ethnic fractionalization and economic
performance, Alesina and La Ferrara
(JEL 2005) identify two main directions for future research. One is to improve the measurement of diversity and
the other to treat diversity as an endogenous variable. This paper tries to address these two issues: it
investigates the effects of ethnic fractionalization on economic growth across countries using unique time-varying
measures. First, we replicate the finding of a weak effect of exogenous diversity on growth and then we show
that accounting for how diversity changes over time and treating it as an endogenous variable makes a difference.
Once diversity is instrumented (with lagged diversity and latitude), it shows a significant negative impact on
economic growth which is robust to different econometric estimators, specifications, polarization measures, as well
as to the use of an index of ethnic-religious-linguistic fractionalization.
Download working paper version: IZA DP CEPR DP
Data constructed for this paper is available here
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