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Johanna Kristin Birnir and David M. Waguespack, "Ethnic inclusion and economic growth," Party Politics, 17 (March, 2011), 243-260. [Available at http://ppq.sagepub.com/content/vol17/issue2/ ]

First paragraph:
Is ethnic social diversity relevant to cross-national variation in economic development, or is the inclusion or exclusion of said groups in political decision-making the more salient factor? We argue that deleterious policy effects resulting in diminished economic growth are caused by exclusion of mobilized ethnic groups from the policy process and not just ethnic social diversity per se. Conversely, a positive impact of ethnicity as more groups are included in the policy process with increasing access to cabinet is due, first, to the fact that a population finding its preferences represented in the policy process likely supports implementation of resultant policy. Second, the policy quality likely improves with greater variety in input. Third, a greater number of included ethnic groups in cabinet increases the number of ethnic partisan veto players in the policy process - thereby generating increased policy stability in the long term. We test this idea first on longrun growth in democracy and, second, on annual indicators of growth. We find that increasing ethnic social fragmentation still negatively impacts on the economy. However, cabinet diversity offsets some of these negative effects as it improves growth of GDP per capita.

Figures and Tables:
Table 1. Long-run growth of real GDP per capita in the 1960s, 1970s and 1980s
Table 2. Descriptive statistics for democratic nations 1975-2004 (N 1/4 1577
Table 3. Annual GDP per capita growth for 1975-2004

Last Paragraph:
In this article, we argue that deleterious policy effects resulting in diminished economic growth are caused by the exclusion of ethnic groups from the policy process and not just ethnic social diversity per se.

For three related reasons we posit that, in democracies, policy output will be most negatively affected where the policy process limits participants to a small homogeneous subset of a diverse pool. The negative impact of ethnic social fractionalization stems from difficulty in policy implementation among a (rent-seeking) population that has no stake in the success of the policy or, worse, may wish it fails,underutilization of available information in formulation of policy and undersupply of public goods.

Last updated March 2011