The current refugee crisis has highlighted the importance of understanding how ethnic and cultural differences affect social cohesion. What are the links between ethnicity and culture, and what is the relationship between diversity and civil conflict? Are ethnic cleavages associated with deep differences in preferences, norms, values, and attitudes? Many people think so. In developing countries, ethnic divisions are often blamed for lack of agreement on the broad goals of society – leading to dysfunctional governance and conflict. Countries with fractionalised ethnic compositions, especially in sub-Saharan Africa, South Asia and Southeast Asia, are prone to social tensions and civil conflicts. In developed countries, the recent rise of populist movements has brought to the fore issues of cultural identity, and there is a growing perception that immigration and multiculturalism may lead to the breakdown of social consensus. The debate over Syrian refugees in Europe is at least as much about cultural values as it is about economic interests.
In recent research, Professor Ignacio Ortuño and Klaus Desmet (SMU) and Romain Wacziarg (UCLA) conducted a systematic investigation of such links between ethnicity and culture. They investigate the empirical relationship between ethnicity and culture, defined as a vector of traits reflecting norms, values and attitudes. Using survey data for 76 countries, they find that ethnic identity is a significant predictor of cultural values, yet that within-group variation in culture trumps between-group variation. Thus, in contrast to the commonly held view, ethnic and cultural diversity are unrelated. Although only a small portion of a country’s overall cultural heterogeneity occurs between groups, they find that various political economy outcomes (such as civil conflict and public goods provision) worsen when there is greater overlap between ethnicity and culture.
The paper, ahead of print at American Economic Review, is available electronically, and it has been feature in The Economist, Vox and other outlets.