Abstract: This paper analyzes the importance of local interaction between individuals of different linguistic groups for the provision of public goods at the national level. The micro-founded theory we develop predicts that a country’s provision of public goods (i) decreases in its overall linguistic fractionalization, and (ii) either increases or decreases in how much individuals locally learn about other groups, depending on whether local interaction mitigates or reinforces antagonism towards other groups. After constructing a 5 km by 5 km geographic dataset on language use for 223 countries, we empirically test our theory. While overall fractionalization worsens public goods outcomes, we find a positive causal effect of local learning. As a result, public goods outcomes are maximized when the diversity of each location mirrors that of the country as a whole.
Presented by:
Joseph Gomes, Navarra
Date & time:
22 Mar 2017 13:00 pm - 22 Mar 2017 14:00 pm
Venue:
2N2.4.16 - Large Seminar Room
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