Diversity and the economy: a cross-country, comprehensive study

Abstract

Using Alesina et al.'s (2003) fractionalization indices that separately measure ethnic (E), linguistic (L) and religious (R) diversity for 180 countries, a cluster analysis is performed to group the countries into three distinct clusters based on their similarities in the three diversity measures. Given these country clusters, this study examines how these different clusters perform, on average, in regard to thirteen different economic and political indicators. The results presented for the economic indicators suggest that ethnic and linguistic diversity measures might be relatively more important in affecting economic outcomes compared to religious diversity. In terms of the political indicators considered in this analysis, the countries in the most ethnically, linguistically and religiously diverse cluster performed statistically lower on average relative to the other country clusters.

Keywords:

• diversity
• cluster analysis
• cross-country
• economic indicators
• political indicators
• global patterns

Additional information

Notes on contributors

Jayoti Das

JAYOTI DAS is a Professor in the Department of Economics at Elon University.

Cassandra DiRienzo

CASSANDRA DIRIENZO is an Associate Professor in the Department of Economics at Elon University.