Implications of Ethnic
Diversity: Nnadozie-Chapter 8
How does ethnic diversity Affect
the Economies of Africa?
Summary Outline-Chap.8
• 1.Introduction
2. Ethnicity & Economic Growth: knowledge gaps?
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3. Ethnic Diversity & Politics…
A. Ethnic Diversity in Democracies
B. Ethnicity in Dictatorships
C. Some Testable Hypothesis
D. Empirical findings
Summary Outline-chap. 8 cont.
• 4.Under
What conditions does Ethnic
Diversity Cause Civil conflict and War?
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A. Financing of Rebellion
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B. Empirical Evidence
• 5. Policy Implications
• 6. Summary
1. Introduction
(based on article by Paul Collier in Nnadozie book)
• Ethnic conflicts have increasingly become major
concerns around the world…
• Africa’s poverty may be in part due to its ethnic
diversity?? (Easterly and Levine)
• Ethnic diversity makes cooperation difficult.
• Verdict: With few specific exceptions, ethnic
diversity neither increases civil war nor reduces
economic growth in democracies.
Authoritarian rule is exception
2. What doe we know about Ethnicity and
economic performance- Knowledge gaps
• Ethnicity is a cultural phenomenon- It is natural..
• Ethnicity (like religion) as a political phenomenon is more fluid and
can be potentially problematic. Example, Islamic Fundamentalism is
a politicized causing serious conflicts in Muslim and other Societies.
• But, kinship in traditional societies can be and efficient
basis for collective action (Posner). Why?
• Kin groups are efficient responses to the information and
contract enforcement problems present in modern
market economies, but lacking in traditional/African
economies.
2. What doe we know about Ethnicity and
economic performance?- Knowledge gaps
• Given that ethnicity can be a basis for social and
political identity, what are the consequences?
• Ethnic diversity or differentiation can be
measured by the index of ethno-linguistic
fractionalization (ELF). This index ranges from
0 (homogenous) to 1 (maximum differentiation).
Observed ranges are from 0 to 0.93
2. What doe we know about Ethnicity and
economic performance?- Knowledge gaps
• Ethnic diversity can be categorized as:
• 1. Ethnic dominance,- example Malaysia, South Africa,
Canada, etc..
• 2. Ethnic fragmentation- makes rebellion more difficult.
• One rationale for rebellion is in Africa is financial.
The differential ability of rebel organizations to raise
finance, depends on the opportunities for predation of
primary natural resources, commodity exports and
contribution of diaspora communities.
• Example- Liberia under Charles Taylor used diamonds
to finance rebellion.
2. What doe we know about Ethnicity
and economic performance? Cont.
• Research shows ethnic dominance
doubles the risk of civil war, fragmentation
may reduce risk, especially under
dictatorships.
• Ethnic Fragmentation makes rebellion
difficult because of lack of cohesion to
form armed groups.
3.Does Ethnic Diversity Lead to
Dysfunctional Politics?
• The argument that ethnic diverse societies
need a strong leader to avoid conflict is a
favorite arguments for Dictators. Nigeria Military
dictators used this an excuse to hold on power
or refuse to yield civilian democratic rule for
years.
• Every time the Military took over in Nigeria, it
used ethnic rebellion as an excuse to come to
power.
3.The Effect of Ethnic Diversity
• A. The Case of Ethnic Diversity in Democracies
• In case of ethnic dominance, divergence and
inequality would be significant.
• For example, In South Africa where blacks
holds 65% of the vote (after 1994-demise of
apartheid), and whites and Asians have higher
incomes, ethnic politics delivers policies that
maximizes the wellbeing of the 33rd percentile as
opposed to 50th percentile with ethnic free
politics.
3. The Effect of Ethnicity in
Democracies
• Ethnic dominance confers durable power on a
winning coalitions which then has an incentive to
sacrifice growth for redistribution.
• Limited ethnic fragmentation may facilitate
cooperative outcomes that avoids or reduces the
costs of unstable minimum winning coalitions.
• The greater the extent of fragmentation, the
more difficult it is to reach a cooperative
solution.
3. The Effect of Ethnicity in
Democracies
• What happens when ethnicity is suppressed?
• In 1960s Uganda and Nigerian Political parties were
ethnic based. After a period of dictatorship, democracy
was established with constitutional changes to suppress
old parties.
• In Uganda politicians can only campaign as individualsthere are no political parties, because of the fear of
ethnic or tribal conflicts.
• In Nigeria two new parties were imposed by departing
military regimes with the requirement that they be multiethnic.
The Effect of Ethnic Diversity Under
Dictatorship
• In absence of checks and balances, rules and
constitutions tend violate civil and property rights..
• In Ethnically diverse societies, tribal loyalties may be
useful in maintaining military cohesion- example:
Saddam Hussein’s control of the Iraqi Army via his
Tikriti clan of the Sunni Muslims. But, they are not
sustainable over the long-term.
• A rare benevolent dictator who succeeds in realizing
gains from social planning may be sufficiently popular
not to need military support. Ex. Kwan Yew of Singapore.
The Effect of Ethnic Diversity Under
Dictatorship
• The relationship between ethnic cohesion and
the power base of dictatorship has important
implications..
• The more ethnically fractionalized the society,
the narrower the maximum military support base
of the dictatorship, the less likely for rebellion.
• On the average predatory dictatorship will
have a narrower support base the more
ethnically fractionalized the society.
Ethnic Diversity, Dictatorship and
Democracy- Testable hypothesis
• The likely effects of ethnic diversity in different political
systems is given in table 8.1 page 163 of Nnadozie
text.
• Ethnic diversity is predicted to be damaging when
ethnic dominance and dictatorship co-exist.
• Beyond dictatorship, ethnic fragmentation does not
appear to produce any worse politics than ethnic
homogeneity, and the political system may work better.
Ethnicity and form of Governance:
Empirically Testing the Hypotheses
• Using data 1960-90, the effect of ethnic diversity
was tested.
• A measure of ethnic diversity (ELF) showed
ethnic diversity interacts with a measure of
political rights. This interaction term is highly
significant and large.
• Ethnic diversity may not have adverse effects in
fully democratized societies, but reduces
economic growth up to 3% in dictatorship.
Empirical Results
• 1. The effect of Ethnic Diversity: Easterly and Levine
hypothesis that ethnic diversity may lead to bad political
or policy decisions.
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In democracies ethnic diversity does not have a
negative effect on the economy, but in dictatorship
ethnicity is likely to intensify predatory behavior, and
therefore harmful on society.
• Also, the hypothesis that effect of ethnic dominance has
negative effect is not supported in democracies. i.e.
Ethnic diversity does not negatively affect economic
performance in free and democratic societies.
Examples, USA, India, etc..
Ethnicity and Conflict
• 4. Are there conditions when Ethnic
Diversity Cause Civil War?
• A. Financing of Rebellion
• B. Empirical Evidence
• 5. Policy Implications
• 6. Summary
4. Does Ethnic Diversity Cause Civil War?
• Standard argument: Rebels rise due to
some “motivation” or “preferences”
• Alternative hypothesis: How they are
orgranized and financed matters..
• Ethnicity affects the risk of conflict through
various ways.
A.The Financing of Rebellion
• The ability of rebels to sustain themselves, in
part, depends upon availability of financial
sources… i.e.There is a finance motivation in
rebellion.
• This source is often predation of primary
commodity exports- Diamonds, Gold, Oil, etc..
• Risk of rebellion will increases dependence on
primary commodities, and decreases per capita
income and growth..
Financing Rebellion
• Much of the rebellion in recent years is for secession
motivated by commodity rents.
• Examples: Civil war in Sierra Leone was over diamond
fields.Conflict in Zaire was over copper and diamonds in
the southeast of this country..
• Nigeria’s conflict( Biafra war in 1960s) was due to oil
discoveries in the region. Columbia’s war was over
Cocaine.
• The secession of Eritrea was motivated, in part, due to
control of Red Sea Coast to extract rent…..
Empirical Evidence
• Collier and Hoeffler tested a statistical model to
explain conflict for 161 countries over from
1960-99, with 1288 observations.
• 73 of which led to civil war, defined as: “where at
least 1000 combat-related deaths…”.
• The effect of primary commodities especially
under dictatorships in these conflicts and wars is
powerful…
Empirical Evidence cont.
• Ethnicity enters the empirical economic model three ways:
• 1. Minority Ethnic dominance in autocratic states increases rebellion
and civil conflict significantly. Examples: Rwanda, Iraq, etc…
• 2.Ethnic fragmented states may not be susceptible to rebellion. For
example, Irian Jaya province of Indonesia with primary exports
did not pose significant rebellion to Indonesia, due to 450 language
groups in this province..
• 3.Ethnicity also enters the mode through diasporas living overseas.
Example include Irish Americans in IRA, Jewish Americans in Israel,
Eritreans- EPLF, Overseas Somali’s contributed money to various
rebels and War Lords based on Clan,that led to the collapse of the
Somale state in 1991.
Policy Implications
• 1. Ethnically diverse democracies actually have less
conflict than homogenous societies. Example: An
example is Somalis in the Horn of Africa, with the same
language, religion-Islam, . The state of Somalia
collapsed in 1991 due to vicious rebellion among clans.
• 2. The trend for secession since WWII has been
remarkable: Slovakia, Slovenia, Croatia, Bosnia, Eritrea,
Chechnya, Quebec, Kosovo, Western Sahara, East
Timor, Somaliland, etc..
• 3. These are often rooted in economic conflict. As the
number of states increases, so are global conflicts..
Policy Implications
• Primary commodities are often the basis for secession
and rebellion in African economies misruled by predatory
governments.
• Secessionist states are characterized by ethnic
dominance. Example: In Yugoslavia, when Slovenia
succeeded ,Croatia followed which turned the Yugoslav
state to a Serb majority. Secessionist states would have
less ethnic diversity due “ethnic cleansing”.
Note: International community should have a stronger
vested interests in preservation of large multiethnic
societies such as Russia, Indonesia, Nigeria, and
India, and make them free and democratic.
Policy Implications cont
• One of the best way to resolve ethnic conflict is to
democratize and free ethnically diverse societies. But,
this is difficult and takes time.
• Ethnic dominance increases the risk of violent civil
conflict in autocratic states, but not in democracies.
• The role of ethnic diasporas in US and Europe in
promoting conflict in the country of origin, should be
minimized for global peace and stability.
Test #2
• Thursday, Feb. 23, over chapters 3,5,8 of
the todaro & Smith text.
• Meet with your groups- make plans for
group presentation and paper.
• Study Guide Questions