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Linguistic Diversity and Redistribution

Klaus Desmet (), Ignacio Ortuno-Ortin () and Shlomo Weber ()
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Ignacio Ortuno-Ortin: Universidad Carlos III, Getafe (Madrid), Spain
Shlomo Weber: Southern Methodist University, Dallas, USA, CORE, Catholic University of Louvain, Louvain-la-Neuve, Belgium, and CEPR

Authors registered in the RePEc Author Service: Ignacio Ortuno Ortin

No 004-08, Working Papers from International School of Economics at TSU, Tbilisi, Republic of Georgia

Abstract: This paper investigates the effect of linguistic diversity on redistribution in a broad cross-section of countries. We use the notion of "linguistic distances" and show that the commonly used fractionalization index, which ignores linguistic distances, yields insignificant results. However, once distances between languages are accounted for, linguistic diversity has both a statistically and economically significant effect on redistribution. With an average level of redistribution of 9.5% of GDP in our data set, an increase by one standard deviation in the degree of diversity lowers redistribution by approximately one percentage point. We also demonstrate that other measures, such as polarization and peripheral heterogeneity, provide similar results when linguistic distances are incorporated.

Keywords: nation formation; genetic diversity; cultural heterogeneity; secession; European Union (search for similar items in EconPapers)
JEL-codes: H77 D70 F02 H40 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2008-07
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