Ethnic Remoteness Reduces the Peace Dividend from Trade Access

Klaus Desmet and Joseph Gomes

No 17895, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper shows that ethnically remote locations do not reap the full peace dividend from increased market access. Exploiting the staggered implementation of the US-initiated Africa Growth and Opportunity Act (AGOA) and using high-resolution data on ethnic composition and violent conflict for sub-Saharan Africa, our analysis finds that in the wake of improved trade access conflict declines less in locations that are ethnically remote from the rest of the country. We hypothesize that ethnic remoteness acts as a barrier that hampers participation in the global economy. Consistent with this hypothesis, satellite-based luminosity data show that the income gains from improved trade access are smaller in ethnically remote locations, and survey data indicate that ethnically more distant individuals do not benefit from the same positive income shocks when exposed to increased market access. These results underscore the importance of ethnic barriers when analyzing which locations and groups might be left behind by globalization.

Keywords: Trade liberalization; Market access; Conflict (search for similar items in EconPapers)
JEL-codes: D74 F13 F6 O12 O55 R11 Z1 (search for similar items in EconPapers)
Date: 2023-02
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Working Paper: Ethnic Remoteness Reduces the Peace Dividend from Trade Access (2023)
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