Ethnic diversity and social welfare provision in non-democracies: Evidence from China

Abstract

A large body of literature suggests that ethnic diversity matters to social welfare provision in democracies by lowering the demand for public projects, but it does not look at the impact of ethnic diversity on social welfare provision in authoritarian regimes. By analyzing county-level data on ethnic composition and public spending on social welfare in China, this study finds that in an authoritarian settings, ethnic diversity is correlated with a higher share of social welfare spending. Despite the divergent preferences people may have for social welfare provision due to ethnic diversity, local Chinese government tends to provide a larger share of social welfare spending in ethnically fragmented places to improve the general well-being of the population and maintain regime stability. This finding extends our understanding of the relationship between ethnic diversity and social welfare provision in non-democratic settings, shedding new light on how regime type affects the shaping of local fiscal policy.