Journal
JOURNAL OF DEVELOPMENT ECONOMICS
Volume 143, Issue -, Pages -Publisher
ELSEVIER
DOI: 10.1016/j.jdeveco.2019.102384
Keywords
Ethnolinguistic diversity; Geographic diversity; Public goods; Local interaction; Antagonism
Categories
Funding
- Fundacion Ramon Areces
- Spanish Ministry of Economy and Competitiveness [ECO2013-42710-P, MDM 2014-0431]
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This paper analyzes the importance of local interaction between individuals of different ethnolinguistic groups for the provision of public goods at the national level. The conceptual framework we develop suggests that a country's public goods (i) decrease in its overall ethnolinguistic fractionalization, and (ii) either increase or decrease in its local-global ethnolinguistic complementarity, a measure of how local interaction affects antagonism towards other groups in the society at large. After constructing a 5 km by 5 km dataset on language use for 223 countries, we empirically explore these theoretical predictions. While overall fractionalization worsens public goods outcomes, local interaction mitigates this negative association. Conditional on a country's overall diversity, public goods outcomes are maximized when there are a few large-sized groups and the diversity of each location mirrors that of the country as a whole.
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