Corruption, Growth and Ethnic Fractionalization: a Theoretical Model

Roy Cerqueti, Raffaella Coppier () and Gustavo Piga
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Raffaella Coppier: University of Macerata

No 216, CEIS Research Paper from Tor Vergata University, CEIS

Abstract: This paper analyzes the existing relationship between ethnic fractionalization, corruption and the growth rate of a country. We provide a simple theoretical model. We show that a nonlinear relationship between fractionalization and corruption exists: corruption is high in homogeneous or very fragmented countries, but low where fractionalization is intermediate. In fact, when ethnic diversity is intermediate, constituencies act as a check and balance device to limit ethnically-based corruption. Consequently, the relationship between fractionalization and growth rate is also non-linear: growth is high in the middle range of ethnic diversity, low in homogeneous or very fragmented countries.

Keywords: corruption; ethnic fractionalization; monitoring cost; economic growth. (search for similar items in EconPapers)
JEL-codes: D73 K42 O43 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2011-11-08, Revised 2011-11-08
New Economics Papers: this item is included in nep-dem, nep-fdg and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Corruption, growth and ethnic fractionalization: a theoretical model (2012)
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