Not a Destiny: Ethnic Diversity and Redistribution Reexamined
Existing cross-country studies have increasingly confirmed the negative relationship between ethnic diversity and redistribution. These studies, however, have mainly focused on the measurement of ethnic diversity and have neglected an important perspective in their empirical analyses: before proving ethnic diversity harms redistribution, one has to show that people do identify with their ethnic groups in political decisions regarding redistribution instead of other potentially salient identities. Reinvestigating the hypothesis in a proper framework, I find no evidence that ethnic diversity negatively affect redistribution. I also find evidence of a supportive role of decentralization in promoting redistribution given critically high levels of diversity and segregation of ethnic groups. The findings pose important questions to other empirical studies regarding the impact of ethnic diversity that have paid inadequate attention to its theoretical complexity.
JEL Classification H5, H7, Z10.