Abstract
This paper analyzes the existing relationship between ethnic fractionalization, corruption and the growth rate of a country. We provide a simple theoretical model. We show that a nonlinear relationship between fractionalization and corruption exists: corruption is high in homogeneous or very fragmented countries, but low where fractionalization is intermediate. In fact, when ethnic diversity is intermediate, constituencies act as a check and balance device to limit ethnically-based corruption. Consequently, the relationship between fractionalization and growth rate is also non-linear: growth is high in the middle range of ethnic diversity, low in homogeneous or very fragmented countries.
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Cerqueti, R., Coppier, R. & Piga, G. Corruption, growth and ethnic fractionalization: a theoretical model. J Econ 106, 153–181 (2012). https://doi.org/10.1007/s00712-011-0253-5
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DOI: https://doi.org/10.1007/s00712-011-0253-5