Public goods and ethnic divisions

Alberto Alesina, Reza Baqir and William Easterly

No 2108, Policy Research Working Paper Series from The World Bank

Abstract: The authors present a model that links heterogeneity of preferences across ethnic groups in a city to the amount and type of public good the city supplies. Results show that the shares of spending on productive public goods - education, roads, sewers, and trash pickup _ in U.S. cities (metro areas/urban counties) are inversely related to the city's (metro area's/county's) ethnic fragmentation, even after controlling for other socioeconomic and demographic determinants. They conclude that the ethnic conflict is an important determinant of local public finances. In cities where ethnic groups are polarized, and where politicians have ethnic constituencies, the share of spending that goes to public goods is low. Their results are driven mainly by how white-majority cities react to varying minority-groups sizes. Voters choose lower public goods when a significant fraction of tax revenues collected from one ethnic group is used to provide public goods shared with other ethnic groups.

Keywords: Public Sector Economics&Finance; Environmental Economics&Policies; Economic Theory&Research; Decentralization; Public Health Promotion; Inequality; Environmental Economics&Policies; Public Sector Economics&Finance; Economic Theory&Research; Economic Stabilization (search for similar items in EconPapers)
Date: 1999-05-31
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Citations: View citations in EconPapers (1403)

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Related works:
Journal Article: Public Goods and Ethnic Divisions (1999)
Working Paper: Public Goods and Ethnic Divisions (1999)
Working Paper: Public Goods and Ethnic Divisions (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:2108

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