Globalization, Institutions, and the Ethnic Divide: Recent Longitudinal Evidence

Phanindra Wunnava, Aniruddha Mitra and Robert Prasch

No 6459, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper investigates the determinants of economic growth emphasizing the role of institutional quality, social fragmentation, and increasing global integration on recent growth experience. Our longitudinal data consists of 103 countries covering the period 1992-2005. We find that democracies have significantly outperformed autocracies over the sample period and the security of property rights has played a critical role in promoting economic growth. Ethnic heterogeneity has been a significant impediment to growth but religious and linguistic heterogeneity have not. Further, while economic globalization has had a general beneficial impact on economic growth, societies marked by greater ethnic heterogeneity have actually gained more from global integration. This suggests the importance of globalization in redressing the detrimental impact of ethnic cleavages in society (Hegre et al, 2003; Bhagwati, 2004; Mousseau and Mousseau, 2008; Dreher et al, 2008).

Keywords: democracy; property rights; ethnic heterogeneity; growth; globalization (search for similar items in EconPapers)
JEL-codes: O43 O47 P14 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2012-03
New Economics Papers: this item is included in nep-dem, nep-fdg and nep-pke
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Published - published as 'Globalization and the Ethnic Divide: Recent Longitudinal Evidence' in: Social Science Quarterly, 2015, 96 (5), 1475-1492

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