No.6 Diversity of Communities and Economic Development: An overview

  • #Working Papers

This paper reviews the literature on the impact of ethnic diversity on economic development. Ethnically polarized societies are less likely to agree on the provision of public goods and more likely to engage in rent seeking activities providing lower levels of social capital. Initial conditions are important determinants of adverse development outcomes. The role of decentralization, democracy and markets as potential remedies are discussed. The paper then presents a number of preliminary hypotheses on the relationship between diversity and instability in order to stimulate future research.

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Author
Gustav Ranis
Date of issuance
March 2010
Related areas
  • #Africa
Topics
  • #Agricultural / Rural Development
  • #Poverty Reduction
Research area
Economic Growth and Poverty Reduction
Research project