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Corruption, growth and ethnic fractionalization: a theoretical model. (English) Zbl 1294.91132

Summary: 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 nonlinear: growth is high in the middle range of ethnic diversity, low in homogeneous or very fragmented countries.

MSC:

91B62 Economic growth models
91D10 Models of societies, social and urban evolution
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