Economic Benefits of Ethnolinguistic Diversity: Implications for ...

The data indicates that high levels of ethnic diversity in Africa are strongly linked to poor policies, low provision of infrastructure, and low levels of education, which in turn are strongly linked with slow, long-term growth. The authors concluded that while the results hardly support a monocausal view of Africa’s difficulties, they do suggest that ethnic divisions have played a significant role in Africa’s growth tragedy.

The study of Easterly and Levine (1997) has become a point of reference in the field. However, there have been several studies that criticized and questioned the findings of Easterly and Levine. Jean-Louis Arcand, Patrick Guillaumont, Sylviane Guillaumont Jeanneney (2000) called Easterly and Levine’s results into question due to the problems of missing data. They argued that there is a potential problem of selection bias for the African countries because the data does not include the countries in Africa that have experienced the slowest growth rates. The authors noticed that the African countries constitute 27 out of 172 observations, and the data is missing precisely for those countries in Africa that have been experiencing the slowest growth. According to the authors, this is an important omission that can lead to a selection bias, which puts in question the results obtained by Easterly and Levine.

The conclusions of Easterly and Levine (1997) were also challenged by Paul Collier (2001). His empirical study showed that ethnic diversity is not “guilty as charged.” In his study, “ethnic diversity neither increases the risk of civil war, nor reduces economic growth” (p. 2). Based on his cross-country regression analysis, multiethnic societies can be fully socially and economically viable.

Collier (2001) designed his study based on a question of whether the effects of ethnic diversity are moderated by the type of diversity, by the type of the political regime, or by the sector of the economy. He distinguished between two types of ethnic diversity: dominance, in which one group constitutes a majority; and fractionalization, in which there are many small groups. Furthermore, he distinguished between two types of political regimes: democracy and dictatorship. Finally, his analysis differentiated between two sectors of the economy: public and private.