Friday, February 15, 2013

Ethnicity and Inequality

I imagine people can interpret this in any number of ways, but its interesting research nonetheless (excerpt; emphasis added):

Ethnic inequality
Alberto Alesina, Stelios Michalopoulos, Elias Papaioannou

A large body of research has shown ethnic diversity to have a negative impact on development. This column suggests that it is the unequal concentration of wealth across ethnic lines that is detrimental for development rather than diversity per se. It shows that ethnic inequality, measured using ethno-linguistic maps and satellite images of light density at night, is associated with lower GDP per capita, worse living conditions, and lower levels of education…

…In recent work (Alesina et al 2012) we put forward and test an alternative conjecture that stresses the intersection of economic inequality and ethnic diversity, namely ethnic inequality.

Our thesis is that inequality is especially deleterious when wealth is unevenly distributed across ethnic or religious lines.

  1. First, inequality in income along ethnic lines is likely to exacerbate the salience of group identity, limit social cohesion by increasing between-group animosity, impede institutional development, lead to state capture, and spur conflict.
  2. Second, income differences across ethnic groups are often both the cause and the consequence of discriminatory policies including the unequal provision of public goods across groups.
  3. Third, as Chua (2003) discusses, in several parts of the world a small (usually market-dominant) ethnic minority controls a sizeable portion of the economy and exerts disproportionate political influence...

The presence of an economically dominant ethnic minority may lower support for free-market institutions (such as trade liberalisation, privatisation, and financial openness), as the majority of the population usually feels that the benefits of capitalism go to just a handful of ethnic groups…

…The first contribution of our paper is to provide measures of within-country differences in wellbeing across ethnic groups, coined as 'ethnic inequality'. Information on income levels of ethnic groups for all countries is not available. Hence, to construct country-level indicators of ethnic inequality (Gini coefficients) for the largest possible sample, we combine ethno-linguistic maps on the location of ethnic groups with satellite images of light density at night, which are available at a fine grid and recent works show that are good proxies of development (see Henderson et al. 2012 and Michalopoulos and Papaioannou 2012, 2013).To isolate the cross-ethnic component of inequality from the overall degree of inequality across regions we also construct proxies of spatial inequality.

The methodology is pretty clever – instead of household surveys, which probably don’t exist for many countries, the authors combined language maps and light densities. The column is longer than the norm for VoxEU, but its accessibly light on the technical details and a good read (a link to the full working paper is provided at the end of this post). The focus is on Africa, but since the data coverage is global, its worth a look.

The inference for Malaysia is obvious, so I won’t spell it out. I will say however, that I once made a presentation to a delegation from Tanzania. If you think we’ve got problems, try a country many times poorer than ours, with 40 (forty!) major tribal groups competing for resources and influence, and over 120 distinct ethnic groups. Now that’s a real development problem.

Technical Notes:

Alesina, Alberto F., and Stelios Michalopoulos & Elias Papaioannou, "Ethnic Inequality", NBER Working Paper No. 18512, November 2012

9 comments:

  1. Thank you for the reading recommendation! Let's hope I have enough little grey cells to understand it.

    *grin*

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    1. The true wealth of nationsFebruary 15, 2013 at 5:11 PM

      Another good read is The Wealth of Nations by Adam Smith 1776. Written from a Christian point of views you can gather how economic wealth is linked to how murderous a race or ethnic race is. In TWON, Adam Smith wrote of how the europeans killed natives in all part of the world according to political and murderous events in Europe. The Spanish killed the Danes, killed the French killed the English killed the Portuguese killed the Germans etc.. you get the idea.

      As the various european ethnic groups became victorious in killing the other tribes, this become translated into their economic wealth which basically are taxes on the mining minerals of the land of other tribes in other continents.

      The europeans tribes were merciless and without conscience as they killed the Aztecs, Mayans in South America as they wanted the copper or gold or tin to bring back to their kings/queen in Europe. The queen/kings usually get 10% of the minerals worth.

      The Wealth of Nation described how the greed of one man, the King or Queen can drive the tribes to kill other tribes and claim their land. But Adam Smith never revealed the europeans tribes murderous rampage throughout the world was driven by their belief in their High Priest the Pope from the Roman Time.

      The King and Queen of Europe were given moral belief by a piece of mechanism called Papal Bull whereby the Roman Catholic Church divide the non Christian world to be plundered and enslaved.

      To know more about this then the book The Dogs of Gods by James Reston give some insight of how under the cloak of supernatural belief of Catholic Christianity the Portuguese, Dutch, English, sailed the seas to slaughter and kill millions of people from India to Burma, China, Phillipine, Indonesia, Malaya etc.

      "Reston does a very good job of linking his three themes together and showing how events were driven by the messianic dreams of powerful people"

      The economic study above failed miserably in linking supernatural belief with human actions. Just like Adam Smith, it was a superficial looks of events and trying to connects dots when there are none.

      The true motivator of mankind is still fear of the unknown as exmplified by Catholic Christianity brutality and irrationality over the centuries of modern mankind.

      Thus the true wealth of nations remain on its ability to wage wars and killed other tribes.

      Only the lonely voice of John Lennon, imagined a world without religions, without heaven above or hell below.

      This humanistic view change the europeans tribes against the priests of Catholic Christians culminating the resignation of the German who claim to be the voice of God on earth today 2013!

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  2. All well and good, Hisham.

    However, I've seen far too many academic studies and theses misused to justify discrimination, racial and religious profiling, ethnic cleansing, bigotry, special privileges, justification of quotas, affirmative action.... well, you get my drift. Hopefully.

    Whatever happened to good, old-fashioned work ethics?

    I am reminded of how migrant communities in the US used education as the great leveller, instead of relying on excuses and fatalistic fallbacks.

    I would suggest that you study "Mein Kampf" it's entirety!



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    1. Jasper,

      Rather coincidentally, I've just finished listening to the Audible.com version of "The Autobiography of Black Hawk" (goodreads.com reviews here, wiki link, Project Gutenburg text here).

      How much of America's growth and prosperity over the years can be attributed to industrious migrants, and how much to the underhanded appropriation of American Indian lands, rights and natural resources?

      The fact remains - social and economic mobility in the US is actually poorer than it is in Europe, and income and wealth inequality are higher.

      America's greatest era of broad-based prosperity - the 1950s and 1960s - was helped along by significant government intervention in affirmative action and subsidised education (e.g. the post-war GI Bill).

      While there have been numerous examples of people who've hit it big, you have to be careful of the "halo" effect. For most, the American dream remains just a dream.

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  3. hisham, not sure what exactly is yr point, r u implying that the lack of affirmative action is one cause of the slow growth in many/(some) countries? i personally think affirmative action drag progress, however it is needed for striving a more balance society n i am all for it.

    without much migrant, industrious or not, i dun see any africa countries make it, my bet is on capitalism if economic growth is what u r having in mind. i read the plight of native american and what white did to them, but i dont think american dream is just a dream, can u deny the fact that the dream allow the opportunity for anyone to earn his wealth as long as they work hard, of course some would make more as in any capitalistis kind of model.

    is this the best model? i dont know, but i see many chinese n islamist that sound critical to america vote a yes to this model with their feet. just like the affluent here choose to put their money in singapore and switzerland regardless there have affirmative action or not.

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    1. HuaYong,

      The point here is less about affirmative action, but more about the phenomenon of inequality and some of its causes.

      Let me say again, economic and social mobility (both upwards and downwards) in the US is generally worse than in Europe.

      This is equivalent to saying that equality of opportunity is worse in the US, which directly contradicts the fundamental basis of the American Dream, that anybody can make it if only they work hard enough.

      The data shows that this isn't generally true - on average, the rich stay rich and the poor stay poor, and the middle class stay in the middle, and this is perpetuated across the generations.

      If there is a difference over the past few decades, is that the chances of middle class families falling into poverty are now somewhat higher, related to stagnant real incomes over the past 40 years or so. The rate of poverty in the US is also a disturbingly high 15%.

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  4. Couldnt help but grin right through as I read the link. Don’t know why but couldn’t help but laugh at some of the very profoundly pathetic comments as well.

    Well, just finished the Das Kapital for the 10th time and after that happened to chance on this, which happens to highlight the myths associated with meritocracy,( a choice cut):

    “But referring to the free national education programme for Malay students he noted that at present the system does not take into account the disadvantage caused by the historical inequalities in the Malay community. Turning to the Special Assistance Plan (SAP) schools, Mr Muigai pointed out that in practice they favour Chinese culture and Mandarin language and add to the marginalization of minorities (OHCHR 2010b).”

    Politics and Ethnicity: Framing Racial Discrimination in Singapore
    ej.lib.cbs.dk/index.php/cjas/article/download/3431/3705

    In the same way, you skewed the illusionary nature of this beast called “hard work” .My pal, Kobayashi (http://www.voxeu.org/article/financial-crisis-management-lessons-japan-s-lost-decade) would probablylaugh at that notion too for he says whatever happened to “smart work”, ‘sly work’ etc but that’s another story…………

    You see terms like ‘hard work’, ‘meritocracy’ etc are normally bandied about by delusionalists, if you get my drift…hopefully. People who rarely converse with reality to assay whether they are still in life, existentially speaking or have checked out of reality into a cloistered delusion to contemplate their zombie selves....if you get my drift again, hopefully.

    And hard work, merit are also often the favourite catchphrases of exploitative scoundrels who have cornered the loot the sly way and need some reputation laundering to give them the desired social respectability. To put it simply; do you think money-launderers and financial scammers would admit to their dastardly deeds..come on….. .

    I am not a cognoscenti and will not pretend to be one as there many poseurs in that mould already but during my engineering studies in California, I chanced upon many seminars and talks delivered by humble , erudite economics professors and experts who have touched on this before. And without any show of puissance nor any display or ersatz intellectuality, they have dispensed with the shibboleths to say exactly what you said above regarding the Yankee, his Injun and his nigger slave nightmare…but again I digress

    Bet those quibbling over the paper can debunk Alesina et al by writing one of their own or pay someone to do that job. I bet Alesina would welcome the challenge this guy below once had to face for his troubles when revealing ethnic discrimination somewhere nearby:

    William KM Lee, “Ethnicity and Economic Marginality: An Analysis of Ethnic Income Inequality in Singapore”, Asian Ethnicity, Carfax Publishing, Taylor & Francis Group, Vol. 5 (1): 27-41, 2004.

    (you have to have a subscription but the conclusions can be seen here: http://classic1.yoursdp.org/news_display.php?id=510)

    And that debunking would be a very inviting prospect for global fame or embarrassment indeed for when does ever get a chance to put some Harvard dons in their puny pigeonholes or be humiliated in return right?

    Finally, often read your takes as much as I do de Minimis, Rocky and other thought provoking sites…but never comment, this being my fist salvo. But just wonder that reading interpretations into the Alesina paper would be a tad too absurd, wouldnt it? I wouldn’t suggest that as the data and conclusions are pretty straightforward and clear cut. Oh by the way. I am still grinning….

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    1. Studies by independent thinkers had noted how the tribes from europe had killed the Red Indian Tribes in north America clutching St. James Bible.
      When the tribes from europe lynched the tribes from Africa they did it quoting bibles.
      The tribes from europe were able to slowly patched together wooden and iron ships to go to the land of other tribes.
      Although their means are meagre it was still much better than that which the other tribes in Africa or Americas. The foundation of the european tribes social structure were based on the priests of pre Romans and post Romans such as Roman Catholics. Shamans pretended to have miracle powers and they hold sway over those who are less pretentious.
      These concept of priests at the pinnacle of most civilisation is the same every where. In Arab world they are called ulamaks and are still powerful as in Iran.
      However, the technological advancement that allow the european mercenary soldiers to travel and killed the world also has the effects of exposing the charlatans of the priesthoods of the Catholics of evangelicals Christians. Slowly, the feudal social structure fell away and replaced by proletariats as in France.
      With the blinkers of religious miracles off, there is no legitimacy of absolute Monarchy. The son of god, or voice of god were decried as bluffology through europe renaissance.
      Thus thinkers were quick to realise, each man must have a vote. Yes the concept of one man, one vote is new in europe until 1800. The legacy of priests and missions and jesuits keeping the masses down with opiate were over and the tribes from Europe became benign. The Anglo Saxon tribes withdraw from Malay States because the majority realised the Malays were their equal. The Christians conviction of killing other tribes had waned as the Japanese tribes which originated from the
      polynesians Malays tribes showed that their Christian god cannot protect
      them from the Japanese God when they were incarcerated in Malaya and Singapore.
      Unlike the Dutch catholics tribes which were slow to learn, they were given a bloody fight by the Malay tribes in Indonesia. But they too withdrew after realising the futility.
      The social equality that is even now occuring in the Us evolved from the Vietnam wars when the stupidity of dying for their Kings/Priests made them revolt. New prophet like John Lennon hold sway over the european tribe through new technology like TV. John Lennon said he was more famous than Jesus. This shows the effect of the new peacnik religion. His conviction that there is no religion, no heaven above us, no hell below us and having sex with Yokko made the europeans tribe realised the fun they have been denied by their tribal priests. Sports too is the new religion in european/us society. Tiger Woods who were shunned from white golf clubs overcome this by hitting harder and more accurate the golf balls. Priests who cannot slam dunk are derided thus who ever dream of influencing the masses must run faster or sing better.

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  5. The paradise of hard work, equal opportunity and dreams come tru is very equal indeed, how dare you Hisham H!!:

    http://www.pewsocialtrends.org/2011/07/26/wealth-gaps-rise-to-record-highs-between-whites-blacks-hispanics/

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