Economic Benefits of Ethnolinguistic Diversity: Implications for ...

Chapter 2

Background

Significant Prior Research

Differing Perceptions of Ethnic Diversity

Recently, there has been an increased discussion in the field of political economy concerning the impact of ethnic diversity on the economic performance of a country. There is disagreement among the scholars concerning the perception of ethnic diversity and its impact on economic performance. Some of them perceive ethnic diversity as a cost to the economy, while others perceive it as a benefit. The discussion between the two sides can be well depicted by presenting the views of Alberto Alesina and Charles F. Doran, since they specifically have been writing extensively about the issue most recently. A thorough review of the literature on the issue can be found in Alesina and La Ferrara (2004), as well as Collier (2001).

Many political economy writers (Alesina & Spolaore, 2003; Alesina et al., 2003b; Easterly & Levine, 1997; La Porta et al., 1999) perceived ethnic diversity as a cost to the society. The most recent work concerning this topic has been written by Alesina and Enrico Spolaore in The Size of Nations (2003).