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Gwen-Jiro Clochard (CREST-Polytechnique) – “Africa's Growth Tragedy: 20 Years On”

March 29, 2018 @ 12:30 pm - 1:30 pm
The PhD Economics Seminar: Every Thursday at 12:30 pm.
Time: 12:30 pm – 1:30 pm
Date: 29th of March 2018
Place: Room 3001.
Gwen-Jiro Clochard (CREST-Polytechnique) – “Africa’s Growth Tragedy: 20 Years On”​

Abstract: In their influential analysis of the determinants of growth in Sub-Saharan Africa,Easterly and Levine (1997) singled out the effect of ethnic divisions, revealing a “diversity burden”. Twenty years later, we here propose to revisit this diversity burden in the light of the substantial progress that has been made in data availability, econometric analysis and the understanding of the channels via which ethnic fractionalization may affect public-good provision. We use a much richer and larger dataset, instrumental-variable (rather than OLS) estimation to avoid potential biases in coefficient estimation, and test different assumptions regarding the channels via which ethnic diversity may influence public-good provision. We here instrument current ethnic diversity with a pre-colonial measure of the fractionalization index.

We confirm the “diversity burden” hypothesis for eight out of the ten public goods considered, finding a substantial causal negative impact of ethnic diversity on public-good provision. However, the size of this effect varies greatly from one public good to another, and the opposite result is found for two public goods: ethnic diversity here \textit{positively} affects access to the electricity grid and cellphone coverage.

Our results therefore call for a better understanding of the channels that link ethnic diversity to public-good provision. The available models allow us to identify three public-good characteristics that produce heterogeneity in the regression coefficients: returns to scale, fixed costs and the complexity of managing the good. The comparison of the theoretical and empirical results leads us to suggest that returns to scale are the main driver of the relationship.

Overall, our results suggest that, under some conditions, the coexistence of ethnic groups can positively affect the provision of public goods. In particular, when returns to scale are high, ethnic diversity appear to play a positive role.

Antoine Bertheau (CREST – ENSAE),  Clémence Lenoir (CREST – ENSAE) & Alicia Marguerie (CREST – Polytechnique)

Lunch registration:
food provided, no registration