Can Institutions Resolve Ethnic Conflict? [book]

William Easterly
1999 Policy Research Working Papers  
Ethnic diversity has a more adverse effect on economic Ethnic Conflict? policy and growth when a government's institutions are William Easterly poor. But poor institutions have an even more adverse effect on growth and policy when ethnic diversity is high. Summary findings High-quality institutions-reflected in such factors as In countries where the institutions are good enough, rule of law, bureaucratic quality, freedom from however, ethnic diversity does not lessen growth or government
more » ... r government expropriation, and freedom from worsen economic policies. government repudiation of contracts-mitigate the Good institutions also reduce the risk of wars and adverse economic effects of ethnic fractionalization genocides that might otherwise result from ethnic identified by Easterly and Levine (1997) and others. fractionalization. However, these forms of violence are Ethnic diversity has a more adverse effect on economic not the channel through which ethnic fragmentation and policy and growth when a government's institutions are its interaction with institutions affect economic growth. poor. But poor institutions have an even more adverse Ethnically diverse nations that want to endure in peace effect on growth and policy when ethnic diversity is high. and prosperity must build good institutions.
doi:10.1596/1813-9450-2482 fatcat:5qru6nentrg23l3vzygsodp5je