Interethnic Proximity and Political Development

Chun Chee Kok (), Gedeon Lim (), Danial Shariat (), Abu Siddique () and Shunsuke Tsuda ()
Additional contact information
Chun Chee Kok: Monash University
Gedeon Lim: Hong Kong university
Danial Shariat: UC Berkeley
Abu Siddique: Royal Holloway, University of London
Shunsuke Tsuda: University of Essex

No 17776, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We exploit a population resettlement program of ethnic minorities in Malaysia to identify long-run effects of interethnic proximity on economic and political development. From 1948 to 1951, the colonial government moved 500,000 rural Chinese into hundreds of isolated, mono-ethnic camps. In ethnic majority Malay communities adjacent to these camps, we find greater economic prosperity and lower vote shares for the ethno-nationalist Malay party. Effects are stronger in areas with historical, interethnic economic complementarities. Primary survey data suggests that trust-building and social integration were key channels. Our findings highlight the importance of persistent, localized contact in the co-evolution of economic and political development.

Keywords: Malaysia; development; political preference; ethnicity; Chinese (search for similar items in EconPapers)
JEL-codes: D72 J15 O15 R23 (search for similar items in EconPapers)
Date: 2025-03
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