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Africa Paper

Africa Paper

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Published by: andrewduguay on May 12, 2009
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Growth, Ethnic Diversity and Political Rights in Sub Saharan AfricaAndrew DuguayDecember 4 2008EB 313
(a)Before doing any research, I initially had a question in my mind, “Does ethnicdiversity have a negative effect on economic growth?” This was a partly unfoundedhypothetical question, but also an inquisitive interrogation of claims recently made thatthe reason the United States does not have universal healthcare is due to the rules of incentives. A more ethnically diverse country such as the U.S. would perceive fewer gains from tax dollars spent on social services than an ethnically homogenous Europeancountry. This would be due to the fact that the perceived benefits from the tax dollarswould be lessened due to more of ones money being shared among “other” people (i.e.another ethnic group that one does not normally associate with). In the same way, ethnicdiversity could effect overall growth if both the majority and minority groups find itdifficult to efficiently and effectively work together.I was curious if this applied to Sub-Saharan Africa at all. What if the forcedcolonization in years past that split socioeconomic groups into countries made it moredifficult for members of the country to pursue economic ends in a way that a societynormally could? The consequences in later years could certainly be war, oppression of minority groups and consequently less overall economic growth due to theunderutilization of all people groups.In my research, I set out to find if ethnic fractionalization negatively effected longterm economic growth in Sub-Saharan Africa. There has been a significant amount of research done on this topic in recent years. Most of the studies can be traced back to theempirical work of Easterly and Levine in 1997 on the effect of ethnic diversity onnational outcomes (1). They created an index (commonly known as ELF) for ethno-linguistic fractionalization measuring the diversity level of a country by languages2
spoken and difference ethnic backgrounds (2). Easterly and Levine then showed thisindex to be a statistically significant variable when determining long term economicgrowth on a country wide level.Since then, many studies have been done using ELF; including one study in 2001 by economist Paul Collier. In his research, Collier showed that ethnic diversity is predicted to be damaging to the economic growth of a country only in particular circumstances, namely dominance and dictatorship (3). Theoretically, this would be dueto the fact that in a democracy, minority groups can effectively be heard and influential ingovernance. Similarly in a country that is not dominated by one ethnic group, there isgreater chance and opportunity for minority groups to have effective say in politicalmatters. In Collier’s research, he controlled for the effect of democracy on ethnicity bymultiplying the variables together. Because of the importance showed in Collier’s work of considering the political rights of country, I did the same for all of my regressions.In Paul Collier’s regression (seen listed as regression 1 in table 1) he used crosssection data over a period of 30 years from 1960-1990. He used the ELF data produced by Easterly and Levine in his regression, but since that time, Alberto Alesina et al. have published an updated ELF data set on ethnic fractionalization using more detailed and upto date findings (4). In my regressions, I attempt to recreate and update Collier’simportant findings on ethnic diversity, democracy and growth. Specifically, I wanted tosee if his methods were relevant to Sub Saharan Africa in a more recent time period, sayfrom 1990 to 2007.3

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