Ethnic tensions and social infrastructure

Abstract

Ethnic tensions may restrict economic growth through a number of infrastructure channels. We extend this literature by (1) using a broad measure of ethnic tensions, (2) considering a variety of measures of social infrastructure for a panel of 87 countries across 16 years and (3) explicitly addressing the endogeneity of ethnic tensions. We find ethnic tensions significantly retard the formation of social infrastructure and, by extension, impose an unnecessary cap on growth and development. As such, governments would well-serve the interests of their populaces by enacting policies, conducting politics and carrying out their daily functions in ways that serve to dampen ethnic tensions, rather than the reverse, which too often seems the case.