Ethnic conflict, institutions and the tragedy of the commons: when human diversity hinders economic growth: empirical evidence from a sample of African countries

This paper analyses the effect of ethnic conflict on economic growth. It presents an econometric approach which develops a simple growth’s model with four ethnic variables and institutional regressors (a democratic and a rule of law index) along with two production factors (capital and labour).The report argues that these events shed light on how multi-ethnic societies are subject to “the tragedy of the commons” as each ethnic group seeks to benefit alone from common resources. In other words, a rent-seeking competition takes place between ethnic groups for the economy’s natural resources which are easily ‘lootable’.Findings include:language rather than ethnic minorities or religion fragmentation explains ethnic disputespopulation growth and tongues’ diversity adversely affect economic growth, while private investment and rule of law foster wealth accumulationpublic investment has had no significant effect on growthdeveloping rights which state clearly rules applicable to all substantially reduce ethnic competition and at least mitigate the pervasive effects of ethnic diversityThe paper proposes two avenues for further research:to investigate on the effect of economic integration on the probability of ethnic disputes, since an economic downturn induced by conflict would be harmful as long as individuals could not generate wealth without trading with one anotherto study the impact of groups’ distinctive features on the probability of disputes: groups are more likely to express themselves as ethnic entities the more pronounced are theirs differences from one another