Many developing countries do not only suffer from weak institutions, poor economic performance and corruption, but also from separatist movements and violent civil conflicts. The question arises why some countries could achieve economic growth and development, while others never experienced considerable economic development and are trapped in a vicious circle of re-occurring violent conflicts and economic deterioration. Since developing countries tend to be more diverse in terms of ethnicity, language and religion and many civil conflicts appear to have an ethnic or religious component, diversity is regarded as a main cause of economic and political instability. Furthermore, many scholars consider higher levels of diversity in the least developed countries to be the crucial factor that leads to inefficient policy decisions and impedes growth and development.
This master thesis addresses the question how diversity affects economic and political stability and elaborates appropriate parameters which are further used in a composite indicator (CI) to quantify a country’s stability, respectively instability. The thesis is structured as follows:
After a review of the literature on the relations between diversity and economic development and civil conflicts in chapter two, the historic and environmental conditions under which different ethnic and linguistic groups emerged are described. Further, the effects of external shocks which shaped ethnic development in the special case of Africa are assessed.
Chapter four introduces the most common measurements of ethnic, linguistic and religious diversity and describes the differences between fractionalisation and polarisation. Several studies describing the effects of different aspects of diversity on various economic and political outcomes are discussed.
This is followed by chapter five which is addressing the causes of instability and civil conflict. It is examined how conflict, as the major outcome of instability, is related to and can be driven by diversity and which roles economic and institutional aspects play in explaining civil conflicts.
In the subsequent part, several indicators which capture different aspects of stability are critically assessed. Further, parameters and their respective weights towards a new composite indicator of instability are elaborated. Subsequently, chapter seven concludes.
Table of Contents
1. Introduction
2. Literature Overview
3. Historic Origins of Ethnic Diversity
3.1 Emergence of Ethnic Variety
3.2 The Slave Trades
3.3 Colonisation and Border Drawing
4. Economic Development and Governance in Diverse Societies
4.1 Different Measures of Diversity
4.2 Effects of Ethnic and Linguistic Diversity
4.3 Effects of Religious Diversity
4.4 Endogeneity and Dynamics of Diversity
4.5 Effects of Social and Political Fragmentation
4.5.1 Ethnic Voting and Favouritism
4.5.2 Party System Fractionalisation
5. Diversity and Stability
5.1 Effects of Instability
5.2 Influence of Diversity on Conflict
5.3 Economic Causes of Civil Conflict
5.3.1 Financial Opportunities of Civil Conflict
5.3.2 Poverty and Inequality as Drivers of Instability
5.4 The Role of Institutions in Civil Conflict and Instability
6. Indices of Instability
6.1 Assessment of Instability Indicators
6.2 Towards a new Composite Indicator of Instability
7. Conclusion
Objectives and Topics
This master thesis investigates how ethnic, linguistic, and religious diversity impacts a country's economic performance and political stability, aiming to develop a composite indicator that quantifies state (in)stability.
- Historical drivers of ethnic diversity, including slave trades and colonial border drawing.
- Methods for measuring diversity, specifically comparing fractionalisation and polarisation.
- The relationship between diverse societal structures, corruption, and public policy outcomes.
- How democratic institutions and redistributive policies can mitigate conflict risks in diverse societies.
- The creation of a novel composite indicator of instability based on economic, social, and political parameters.
Excerpt from the Book
3.2 The Slave Trades
An important event that deepened the cleavages between different ethnicities in Africa was the slave trade. Even before the first Europeans arrived, slave trading was a widespread phenomenon within Africa. Based on existing structures, European and Arab slave traders exacerbated and commercialised the slave trade in Africa. Between the 15th and the 20th century four different slave trades shook the continent. In the trans-Atlantic slave trade, people from East, West and West-Central Africa were traded to the European colonies in North and South America. The slavery of the other three routes can be dated back even earlier. In the trans-Saharan slave trade, slaves from Sub-Sahara Africa were brought to North Africa. In the Red Sea slave trade, slaves were taken from inner Africa to the Arab regions in the Middle East.
An important characteristic of the slave trades was that the local African people enslaved each other and sold the slaves to the foreigners. Normally slaves were captured by raiding villages. The threat of being raided was countered by an increased arming, but modern weapons could only be acquired from Europeans in exchange for slaves. This unsafe environment led to a vicious cycle where increasing enslavement of others was necessary to obtain more weapons and to be able to defend oneself against enslavement. Pre-existing communities such like village federations broke up and raided each other but also within the own community. This prevented the development of broader ethnic identities and increased ethnic fractionalisation. The internal mistrust and conflict undermined political stability.
Summary of Chapters
1. Introduction: Presents the research focus on how diversity leads to economic and political instability and outlines the thesis structure.
2. Literature Overview: Summarizes existing empirical studies on the relationship between diversity, economic development, and civil conflicts.
3. Historic Origins of Ethnic Diversity: Analyzes geographical and historical factors, such as slave trades and colonial border drawing, that shaped contemporary ethnic variety in Africa.
4. Economic Development and Governance in Diverse Societies: Examines measurements of diversity and its impact on public policy, corruption, and economic growth.
5. Diversity and Stability: Discusses the link between social fragmentation, instability, and the risk of civil conflict, highlighting the role of institutions and resource accessibility.
6. Indices of Instability: Evaluates existing instability indicators and proposes a new methodology for a composite instability index.
7. Conclusion: Summarizes the thesis findings, emphasizing the complexity of the diversity-development link and the importance of inclusive political institutions.
Keywords
Ethnic Fractionalisation, Religious Polarisation, Economic Stability, Civil Conflict, Political Institutions, Composite Indicator, Governance, Inequality, Slave Trades, Colonial Legacy, Rent-seeking, Democracy, Autocracy, Social Capital, Resource Curse
Frequently Asked Questions
What is the fundamental objective of this thesis?
The primary goal is to examine how different forms of diversity—ethnic, linguistic, and religious—influence a country’s economic and political stability, and to elaborate a composite indicator (CI) to quantify this instability.
What are the central thematic areas covered in this work?
The work explores historical origins of diversity, the economic impact of societal fragmentation, the causes of civil conflict, the role of institutions, and methods for creating quantitative instability indices.
What research methodology is employed?
The author reviews extensive empirical literature on cross-country diversity and development outcomes, critically assesses existing instability frameworks, and synthesizes these insights to propose a new, weighted composite indicator of instability.
How does ethnic diversity impact economic growth according to the text?
The text suggests that high levels of diversity often lead to sub-optimal public policy decisions and corruption due to uncoordinated rent-seeking by different groups, which in turn negatively impacts long-term growth.
What role do institutions play in managing diversity?
Political institutions, especially democratic ones, are described as crucial for mitigating the adverse effects of diversity by providing checks and balances and encouraging inclusive decision-making rather than exclusive ethnic favouritism.
What key factors define the author's composite indicator?
The proposed indicator categorizes 26 parameters into risk exposure and coping capacity across three dimensions: economic, social, and political instability.
How do slave trades continue to impact modern African societies?
The slave trades fostered long-term mistrust, undermined local political complexity, and prevented the development of broader ethnic identities, contributing to persistent ethnic fractionalisation today.
Why do the author and studies cited distinguish between fractionalisation and polarisation?
Fractionalisation refers to the sheer number of different sub-groups, whereas polarisation emphasizes the distance between large, competing groups; the latter is often more associated with severe conflict and violence.
- Arbeit zitieren
- Christian Brandes (Autor:in), 2017, The Effects of Diversity on Economic and Political Stability, München, GRIN Verlag, https://www.grin.com/document/431010
