Abstract
The effects of ethnic geography, i.e., the distribution of ethnic groups across space, on economic, political and social outcomes are not well understood. We develop a novel index of ethnic segregation that takes both ethnic and spatial distances between individuals into account. Importantly, we can decompose this index into indices of spatial dispersion, generalized ethnic fractionalization, and the alignment of spatial and ethnic distances. We use maps of traditional ethnic homelands, historical population density data, and language trees to compute these four indices for more than 150 countries. We apply these indices to study the relation between historical ethnic geography and current economic, political and social outcomes. Among other things, we document that countries with higher historical alignment, i.e., countries where ethnically diverse individuals lived far apart, have higher-quality government, higher incomes and higher levels of trust.
Highlights
There is a vast literature on how a country’s ethnic diversity affects economic, political and social outcomes
We find a negative relation between ethnic segregation and the quality of government, similar to Alesina and Zhuravskaya (2011) with their index of a-spatial segregation in their sample of 97 countries
To better understand the role of ethnic geography and to mitigate well-known problems of a-spatial segregation measures, we have developed a new segregation index that is based on ethnic distances between groups and spatial distances between locations rather than categorical data on ethnic groups and administrative units
Summary
There is a vast literature on how a country’s ethnic diversity affects economic, political and social outcomes. In part (b) our index suggests that the society in the right diagram is less segregated than the society in the left diagram, because of the lower ethnic distance between individuals in different locations (represented by more similar tones of gray), all else being equal This is captured by the generalized ethnic fractionalization component. Conditionally on ethnic fractionalization and spatial dispersion, societies in which ethnically diverse people live far apart are, on average, better governed, richer and more trusting Such conditionality is what differentiates the analysis of segregation from the analysis of alignment: higher alignment does not indicate higher segregation (relative to another country), but a level of segregation higher than what the country would have had, had all ethnic groups been represented in all locations with population shares identical to their country shares.
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