Public Goods and Ethnic Divisions

Alberto Alesina, Reza Baqir and William Easterly

The Quarterly Journal of Economics, 1999, vol. 114, issue 4, 1243-1284

Abstract: We present a model that links heterogeneity of preferences across ethnic groups in a city to the amount and type of public goods the city supplies. We test the implications of the model with three related data sets: U. S. cities, U. S. metropolitan areas, and U. S. urban counties. Results show that the shares of spending on productive public goods—education, roads, sewers and trash pickup—in U. S. cities (metro areas/urban counties) are inversely related to the city's (metro area's/county's) ethnic fragmentation, even after controlling for other socioeconomic and demographic determinants. We conclude that ethnic conflict is an important determinant of local public finances.

Date: 1999
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Working Paper: Public Goods and Ethnic Divisions (1999)
Working Paper: Public Goods and Ethnic Divisions (1997)
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