Does ethnic diversity hurt fiscal sustainability?

Abu Bakkar Siddique ()
Additional contact information
Abu Bakkar Siddique: Schar School of Policy and Government, George Mason University

Economics Bulletin, 2021, vol. 41, issue 2, 532-543

Abstract: This paper suggests that ethnically heterogeneous societies are collectively careless about fiscal sustainability. It provides fresh evidence about the impact of ethnic diversity on fiscal governance, specifically on public spending, revenue, and debt. The findings based on a two-way fixed effect (FE) estimation for a balanced panel dataset suggest that rising ethnic diversity in the U.S. generates higher public debt per capita and fiscal indiscipline, which are mainly driven by lower contributions to public revenue while maintaining enduring public spending. Ethnically fragmented states also receive smaller intergovernmental revenue which also hurts fiscal balances.

Keywords: Ethnic diversity; fiscal disciplines; public debt; public revenue; public expenditure; intergovernmental transfers (search for similar items in EconPapers)
JEL-codes: H3 H5 (search for similar items in EconPapers)
Date: 2021-04-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2021/Volume41/EB-21-V41-I2-P47.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-20-01098

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().