Ethnicity Communication and Growth

Jean-Louis Leslie Arcand (), Patrick Guillaumont () and S.G. Jeanneney
Authors registered in the RePEc Author Service: Sylviane Guillaumont Jeanneney ()

Working Papers Series from Centre for the Study of African Economies, University of Oxford

Abstract: In this paper we consider the link often alleged between ethnic diversity and the growth rate of GDP per capita. We first assume that it is ethnic polarization rather than ethnic fragmentation that is harmful for growth so that the relationship may be non-linear. Second, we hypothesize that the impact of ethnic diversity on growth may depend on communication costs. This leads us to estimate a traditional growth rate equation on cross sectional data in a switching regression framework. In "low communication costs countries", the relationship between growth and ethnic diversity is U-shaped. On the other hand, in "high communication costs countries", growth is a decreasing function of ethnic diversity and the severity of the latter's deleterious impact is an increasing function of communication costs, proxied here by the illiteracy rate. The regime that a country belongs to is a function of two proxies for communication costs: the illiteracy rate and population density. The impact of ethnic diversity on growth seems not to operate through macroeconomic policy choices. Rather it is a direct transmission mechanism, in which ethnic diversity affects private and public resource allocation, that appears to dominate.

Keywords: ETHNIC GROUPS; COMMUNICATION; ECONOMIC GROWTH (search for similar items in EconPapers)
JEL-codes: O10 O40 O47 J70 (search for similar items in EconPapers)
Date: 2000
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Related works:
Working Paper: Ethnicity, Communication and Growth (1998)
Working Paper: Ethnicity, Communication and Growth (1999)
Working Paper: Ethnicity, Communication and Growth (1999)
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