Does Ethnolinguistic Diversity Preclude Good Governance? A Comparative Study with Alternative Data, 1990-2015

To what extent does ethno-linguistic diversity hinder good governance? Using a variety of data measuring political and economic corruption for 150 countries over 24 years, we find positive effects between ethno-linguistic diversity and corruption, but the substantive effects are very slight. Higher diversity also predicts higher economic freedom and its subcomponents, measures routinely used as proxies of sound economic governance. Indicators of ethnic frictions measured as ethnic exclusion from state power and discrimination, show positive effects on good governance, results at odds with the idea that governance is harmed by fraught ethnic relations. These findings suggest that the effects of societal diversity do not uniformly explain the failure of governance. We also find diversity to matter negatively when assessing violent state repression of dissent. The results are robust to a host of alternative specifications, data, and estimating strategy, including the inclusion of region fixed effects and hybrid fixed effects.