Social Divergence and Economic Performance

R. Quentin Grafton, Stephen Knowles () and Dorian Owen

No 0103E, Working Papers from University of Ottawa, Department of Economics

Abstract: The paper introduces the concept of social divergence defined as the social barriers to communication and exchange between individuals and groups of individuals within a society. Social divergence is determined by the characteristics of a society including the distribution of income, ethnolinguistic diversity, religious diversity, educational distance, and other factors. The hypothesis is that social divergence reduces the degree of interaction between individuals that stimulates innovation and leads to the diffusion of productivity-enhancing ideas. Using a cross section of 31 developing countries, total factor productivity (TFP) is regressed on measures of social divergence. The results indicate that, separate from any effects due to factor accumulation, higher levels of social divergence result in lower levels of economic performance.

Keywords: social divergence; total factor productivity (search for similar items in EconPapers)
JEL-codes: C2 O4 P0 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2001
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Citations: View citations in EconPapers (6)

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