Avital Livny, Assistant Professor, Political Science, University of illinois at Urbana-Champaign.
The negative associations between diversity and economic growth, public goods provision, and interpersonal trust may be some of the few established “laws” of political economics. But the validity of these empirical patterns ultimately depends on the quality of the underlying data, and estimates of group-size typically used to calculate fractionalization may suffer from bias, if they exist at all. To address this potential measurement error, a new method for estimating group-size and calculating fractionalization is proposed which uses self-identification in cross-national survey data. New estimates of ethnic, religious, and linguistic diversity from over 170 countries are provided, based on data from over 7 million survey respondents. The new indices are statistically significantly different from existing ones in a supra-majority of cases. Further, using the updated measure of ethnic diversity, the correlation between diversity and economic growth no longer holds, a difference driven by the inclusion of a number of sizable ethnic groups ignored in the existing measures.
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