Ethnic Fractionalization Research Articles

Land, history or modernization? Explaining ethnic fractionalization

Ethnic fractionalization (EF) is frequently used as an explanatory tool in models of economic development, civil war and public goods provision. However, if EF is endogenous to political and economic change, its utility for further research diminishes. This turns out not to be the case. This paper provides the first comprehensive model of EF as a dependent variable. It contributes new data on the founding date of the largest ethnic group in each state. It builds political and international variables into the analysis alongside historical and geoclimatic parameters. It extends previous work by testing models of politically relevant EF. In addition, this research interprets model results in light of competing theories of nationalism and political change. Results show that cross-national variation in EF is largely exogenous to modern politico-economic change. However, the data are inconclusive with respect to competing geoclimatic, historical institutional and modernist theories of ethnogenesis.

An empirical examination of the determinants of the shadow economy

Using a statistical methodology guided only by data and based on a genetic algorithm, we select the best econometric model for explaining the determinants of the size of the shadow economy, its main determinants being: taxes on capital gains of individuals, corporate taxes on income, profits and capital gains, domestic credit, bank secrecy, ethnic fractionalization, urban population, globalization, corruption and the socialist legal origin of country.

Ethnic Fractionalization, Governance and Loan Defaults in Africa

We present a theoretical model of moral hazard and adverse selection in an imperfectly competitive loans market that is suitable for application to Africa. The model allows for variation in both the level of contract enforcement (depending on the quality of governance) and the degree of market segmentation (depending on the level of ethnic fractionalization). The model predicts a specific form of non-linearity in the effects of these variables on the loan default rate. Empirical analysis using African panel data for 111 individual banks in 29 countries over 2000-2008 provides strong evidence for these predictions. Our results have important implications for the conditions under which policy reform will enhance financial development.

Diversity and Social Capital in the U.S: A Tale of Conflict, Contact or Total Mistrust?

In this paper we explore the relationship between ethnic fractionalization and social capital. First, we test for time differences in the impact of ethnic fractionalization on social capital using U.S. data from 1990, 1997 and 2005. Subsequently we examine the data for evidence of the conflict, contact and hunker-down theories espoused by Putman in explaining what happens over time when individuals interact with those of differing ethnicities. We find no evidence of heterogeneity in the impact of ethnic fractionalization on social capital over time. In addition we find evidence of the conflict theory and no evidence of hunker-down or contact theories. Our results suggest that as communities become more diverse, there is a tendency for social capital to decline.

Robust Multiple Regimes in Growth Volatility

In this paper we uncover growth volatility regimes and identify their robust determinants using a large international panel of countries. In doing so we propose a novel empirical methodology that allows us to simultaneously deal with two key elements of model uncertainty, namely theory uncertainty and parameter heterogeneity, by unifying two recent econometric techniques: Bayesian Model Averaging and Threshold Regression. We find ample evidence of parameter heterogeneity and model uncertainty. Our results highlight the role of Ethnic Fractionalization, Institutions, Financial Development, Health, and Geography.

What Affects Innovation More: Policy or Policy Uncertainty?

Motivated by a theoretical model, we empirically examine for 43 countries whether it is policy or policy uncertainty that affects technological innovation more. We find that innovation, measured by growth in patent counts, citations, and originality, is not, on average, affected by which policy is in place. Innovation, however, drops significantly during times of policy uncertainty measured by national elections. To establish causality, we use close presidential elections, whose timings are pre-determined and results are unpredictable, and ethnic fractionalization that are likely exogenous to policy and policy uncertainty. Political compromise, our paper concludes, is a plus for innovation.

Inequality and Fractionalization

We present evidence that ethnic fragmentation explains variations in per capita income, institutions, and schooling better than income inequality when both are treated as endogenous. To do so, we identify instruments for ethnic fractionalization and income inequality based on historical experience. Using instrumental variables estimation, we find that ethnic fractionalization explains the level of income both when income inequality is included as a control in the estimation and when it is not. However, we find no evidence that income inequality affects the level of income when ethnic fractionalization is properly treated as an endogenous variable. We have similar findings when other development outcomes such as schooling or proxies for institutional quality are used as dependent variables. These results are robust to various controls and changes in the sample size and suggest that some of the previous findings regarding the effect of income inequality on development should be attributed to ethnic fractionalization.

Ethnic fractionalization, natural resources and armed conflict

Thus far, researchers working on ethnicity and resources as determinants of civil conflict have operated largely independently of each other. While there is plenty of evidence that natural resources may spur armed conflict, empirical evidence for the nexus between ethnic fractionalization and conflict remains inconclusive. Some authors conclude that ethnically fractionalized societies are actually spared from intrastate violence. Others find either a positive relationship or none at all between ethnic fragmentation and internal conflict. In this context, this paper serves two purposes: first, it shows that salience-based fractionalization indices are associated with a higher risk of ethnic conflict onset; second, it finds evidence that oil further increases the conflict potential within fractionalized countries. The combination of oil and a shared identity seems to help overcome the collective action problems associated with rebellion, by providing recruitment pools, strong motives and the necessary financial means for insurgency. Employing logit models for pooled time-series cross-sectional data, our quantitative analysis shows that various ethnic fractionalization indicators are robustly linked to a substantially increased risk of ethnic armed conflict onset in a subset of oil-abundant countries.

Connecting corruption to ethnic polarization and religious fractionalization

Purpose – The paper aims to investigate the connection between corruption and ethnic polarization and religious fractionalization. Design/methodology/approach – Analysis of variance and regression expectation models were used to identify groups of countries for their similarities and differences. Findings – Results show that significant statistical differences exist between the countries grouped by human development, income and developing countries. Countries with expectations higher or lower than the norm in corruption were identified. Originality/value – The paper highlights the connection between corruption and ethnicity for some 127 countries.

Disequilibrium Adjustment and the Rate of Tropical Deforestation

Tropical deforestation has been one of the most significant global environmental changes of recent decades and has spurned a substantial academic literature. Despite this, the most basic theoretical predictions — such as the role of income and population growth in driving forest changes — fail to be consistently confirmed in the empirical literature. We argue that part of this failure lies with the implicit assumption of instantaneous adjustment of forest cover to changes in determining variables; and we use dynamic panel data analysis to provide evidence that the agreement between theory and empirics can be substantially improved by paying more attention to disequilibrium adjustment processes. Additionally, our results suggest an important role for ethnic fractionalization in deterring deforestation but no evidence of an effect of corruption.

A Multi-level Empirical Study of Ethnic Diversity and Shadow Economy as Moderators of Opportunity Recognition and Entrepreneurial Entry in Transition Economies

Our multi-level model about the relationship between opportunity recognition and entrepreneurial entry in transition economies suggests that ethnic fractionalization along with the size of the shadow economy are moderators of individual-level opportunity recognition. Whereas ethnic diversity increases entrepreneurial entries, a large informal sector appears to decrease them. We also find that opportunity recognition may be a more important predictor of entry when ethnic diversity is low and when the shadow economy is small. Thus, our study contributes to the literature examining the influence of contextual factors on entrepreneurial entry. Succinctly, ethnic diversity can substitute for opportunity recognition, whereas the informal economy increases its importance. Consequently, it appears that ethnic heterogeneity in transition economies may be a valuable driver of entrepreneurial entry even in the absence of opportunity recognition, while the size of the informal economy makes opportunity recognition dearer.

The Role of the State on Cross-National Homicide Rates

Although previous research has established important links between economic factors (e.g., economic inequality), social support variables, ethnic fractionalization, and cross-national homicides, one important area remains unexplored. Relatively little is known about how the role of the state affects cross-national homicide rates. Using data from 183 nations, this study examined the effect of the role of the state (political instability, regime type, and use of the death penalty) on homicide rates. The findings indicate that homicide rates are higher in countries that are politically unstable. In addition, anocracies (transitional states that have a mixture of democratic and autocratic features) were found to be correlated with higher homicide rates. Suggestions for future research are discussed.

Bringing the military back in: The politicisation of the military and its effect on democratic consolidation

Empirical research has shown how the role of institutions, civic culture, ethnic fractionalisation, the political economy, and demographic factors affect the stability of democracies, but none has explored the role of the military as an institution that can drastically influence the process of democratic consolidation. This led many scholars to notice how the study of comparative democratisation has been state-centric, but it has largely neglected the role of the military in determining post-transitional outcomes. Thus, this study takes on this challenge by examining the role of the military in the democratisation process more than 30 years after the third wave. The results suggest that highly politicised military structures among transitional states have a deleterious effect on the quality of democracy. More specifically, if the military has institutionalised its role in politics as being interventionist, the likelihood of democratic consolidation becomes difficult. The article highlights the importance of restricting reserved domains granted to the military in the transition process in order to strengthen prospects for democratic stability.

A configurational analysis of ethnic protest in Europe

This article analyzes the conditions under which ethnic minorities intensify or moderate their protest behavior. While this question has been previously asked, we find that prior studies tend to generalize explanations across a varied set of ethnic groups and assume that causal conditions can independently explain whether groups are more or less mobilized. By contrast, this study employs a technique – fuzzy-set analysis – that is geared toward matching comparable groups to specific analytical configurations of causal factors to explain the choice for strong and weak protest. The analysis draws on a sample of 29 ethnic minorities in Europe and uses three group and two contextual conditions inspired by Gurr’s ethnopolitical conflict model to understand why some ethnic minorities protest more frequently than others. We find that two group-related factors have the strongest claim to being generalizable: while territorial concentration is a necessary condition for strong protest, national pride is a necessary condition for weak protest. The contextual factors of level of democracy and ethnic fractionalization, which are often emphasized in the literature, and the perceived political discrimination of a group, are neither necessary nor individually sufficient conditions for either strong or weak protest. Hence, they help understanding some cases, but not all, and only in combination with other conditions. Such causal complexity, inherent in the phenomenon of ethnic protest, underscores the need for a case-sensitive, yet comparative, approach.

Evidenced Formal Coverage Index and universal healthcare enactment: A prospective longitudinal study of economic, social, and political predictors of 194 countries

Determinants of universal healthcare (UHC) are poorly empirically understood. We undertook a comprehensive study of UHC development using a novel Evidenced Formal Coverage (EFC) index that combines three key UHC elements: legal framework, population coverage, and accessibility.Applying the EFC index measures (legislation, ≥90% skilled birth attendance, ≥85% formal coverage) to 194 countries, aggregating time-varying data from 1880–2008, this study investigates which macro-economic, political, and social indicators are major longitudinal predictors of developing EFC globally, and in middle-income countries.Overall, 75 of 194 countries implemented legal-text UHC legislation, of which 51 achieved EFC. In a country-year prospective longitudinal analysis of EFC prediction, higher GDP-per-capita (per GDP-per-capita doubling, relative risk [RR]=1.77, 95% CI: 1.49–2.10), higher primary school completion (per +20% completion, RR=2.30, 1.65–3.21), and higher adult literacy were significantly associated with achieving EFC. Results also identify a GDP-per-capita of I$5000 as a minimum level for development of EFC. GDP-per-capita and education were each robust predictors in middle-income countries, and education remained significant even controlling for time-varying GDP growth. For income-inequality, the GINI coefficient was suggestive in its role in predicting EFC (p=0.024). For social and political indicators, a greater degree of ethnic fractionalization (per +25%, RR=0.51, 0.38–0.70), proportional electoral system (RR=2.80, 1.22–6.40), and dictatorships (RR=0.10, 0.05–0.27) were further associated with EFC.The novel EFC index and this longitudinal prospective study together indicate that investment in both economic growth and education should be seen of equal importance for development of UHC. Our findings help in understanding the social and political drivers of universal healthcare, especially for transitioning countries.

Local exposure to toxic releases: Examining the role of ethnic fractionalization and polarisation

This paper examines the role played by community characteristics in influencing local exposure to toxic releases, focusing specifically on ethnic fractionalization and polarisation. In contrast to the previous literature, this study argues that it is the fractionalization and/or polarisation of ethnic groups that is the relevant consideration, rather than the population share of ethnic minorities, since such ethnic divisions may significantly increase the difficulty of coordinating community action. Using toxic release data for the periods 1990 to 1995 and 2000 to 2005 we find that measures of ethnic divisions have a positive relationship with toxic releases. This finding persists across a range of robustness exercises.

How Ethnic Diversity Affects Economic Development

This paper investigates the empirical relationship between the two concepts of ethnicity and economic growth. Ethnicity is assumed to affect economic growth through a number of possible transmission channels that are generally included in cross-country growth regressions by proposing an extended econometric system of equations to describe growth incorporates new channel variables for the potential indirect effects of ethnicity that are important in the process of economic development. The results, based on a sample of 95 countries for the period 1960-1999, suggest that the concept of ethnic fractionalization is a strong predictive measure for the direct effect of ethnicity on growth, whereas the concept of ethnic polarization has non-negligible indirect economic effects through the specified channel variables.

The Political Economy of Urbanization in Modern Botswana

Despite the large attention given to ethnic fractionalization within the field of political economy, the sources of modern ethnic change have remained opaque. I argue here that urbanization incentivizes ethnic homogenization by lowering the value of land relative to human capital and raising the value of broader urban identities. As evidence I take the example of Botswana, which has had the highest rate of urbanization of any country in the world since 1950. As expected, I find evidence that urbanization has indeed led to higher levels of ethnic homogeneity in Botswana as people entered the modern urban economy and shed their rural tribal identities. Moreover, I utilize variation within Botswana as regards how the relative value of land affects ethnic identity: in contrast to other tribes, the Batlokwa have remained tribalistic as regards land ownership in large part because their land lies on the outskirts of the capital city and remains highly valuable relative to land elsewhere in Botswana.

Ethnic heterogeneity and party system size: A district-level analysis

It has been theoretically and empirically shown that ideological diversity complements the effect of institutions on the development of party systems and the number of political parties that ensue. Thus, students of party and electoral systems now commonly employ ethnic fractionalization as an indicator of ideological differences; however, there is no unilaterally agreed upon data set that scholars use. In addition, extant data sets measure heterogeneity at the national level, rather than at the district level, where electoral competition takes place and where both institutional and social factors matter most. Using a multi-level empirical analysis, this article illustrates the interactive effect of the two main district characteristics – magnitude and heterogeneity – on the number of parties. It demonstrates the analytical benefit of using district-level characteristics in explaining party system size and aims to reduce the data gap by providing a district-level ethnic heterogeneity data set for 18 European states.

What Determines Protection of Property Rights? An Analysis of Direct and Indirect Effects

Using cross-country data, we evaluate four conceptually distinct causal variables believed to shape property rights institutions: Legal Origin, Endowments, Ethnic Diversity, and Religion. Given the correlations between the explanatory variables, it is difficult to fashion empirical tests which are consistent in their treatment of the competing theories and to know which regressions to take seriously, giving rise to competing interpretations in the literature. We identify which of the variables are direct determinants of property rights protection and which are not, and subject the outcomes to a battery of robustness tests. We find that ethnic fractionalization is the dominant institutional predictor of property rights protection across the world. Despite the attention it has received in the literature, the impact of Legal Origin on protection of property rights appears fragile and dependent on the inclusion of transition economies in the sample.