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Cited by 5,649Culture, Economy, and Development StudiesEconomic Growth and DevelopmentEconomic Growth and Productivity

Africa's Growth Tragedy: Policies and Ethnic Divisions

Easterly, W., Levine, R.·1997·The Quarterly Journal of Economics
DOI 10.1162/003355300555466
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Abstract

Explaining cross-country differences in growth rates requires not only an understanding of the link between growth and public policies, but also an understanding of why countries choose different public policies. This paper shows that ethnic diversity helps explain cross-country differences in public policies and other economic indicators. In the case of Sub-Saharan Africa, economic growth is associated with low schooling, political instability, underdeveloped financial systems, distorted foreign exchange markets, high government deficits, and insufficient infrastructure. Africa's high ethnic fragmentation explains a significant part of most of these characteristics.

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  • Country borders contrived by colonial powers in Africa created ethnically fragmented polities with detrimental developmental consequences.

    “This mirrors the well-known argument that country borders contrived by colonial powers in Africa created ethnically fragmented polities with detrimental developmental consequences (for example, Easterly and Levine 1997).”

    From Why Do Developing Countries Tax So Little? (2014) · cites this paper as Easterly and Levine 1997

  • High-quality institutions can mitigate the adverse economic effects of ethnic fractionalization.

    “High-quality institutions-reflected in factors such as the rule of law, bureaucratic quality, and freedom from government expropriation and repudiation of contracts-can mitigate the adverse economic effects of ethnic fractionalization identified by Easterly and Levine (1997) and others.”

    From Diversity Matters in the World of Finance: Does Ethnic and Religious Diversity Hinder Financial Development in Developing Countries? (2025) · cites this paper as Easterly and Levine (1997)

  • In developing countries, ethnically polarized societies under competitive rent-seeking conditions have difficulty agreeing on public goods like infrastructure, education, and sound policies.

    “Second, in developing countries, ethnically polarized societies under competitive rent-seeking conditions have difficulty agreeing on public goods like infrastructure, education, and sound policies.”

    From Diversity Matters in the World of Finance: Does Ethnic and Religious Diversity Hinder Financial Development in Developing Countries? (2025) · cites this paper as Easterly and Levine 1997

  • This difficulty brings about two fundamental setbacks that are endemic disorders for financial development: rent-seeking activities and incongruity in public policies.

    “Furthermore, this brings about two fundamental setbacks that are endemic disorders for financial developmentrent-seeking activities and incongruity in public policies (Easterly and Levine 1997).”

    From Diversity Matters in the World of Finance: Does Ethnic and Religious Diversity Hinder Financial Development in Developing Countries? (2025) · cites this paper as Easterly and Levine 1997

  • Ethnic diversity creates more conflict in society.

    “First, ethnic diversity creates more conflict in society, which results in low incomes, low levels of schooling, and insufficient infrastructure (Alesina and Rodrik 1994;Alesina and Spolaore 1997;Easterly and Levine 1997).”

    From Diversity Matters in the World of Finance: Does Ethnic and Religious Diversity Hinder Financial Development in Developing Countries? (2025) · cites this paper as Easterly and Levine 1997

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Authors
Easterly, W., & Levine, R.
Affiliations
  • World Bank (US)
  • University of Virginia (US)
ORCID
Venue
The Quarterly Journal of Economics
Publisher
Oxford University Press (OUP)
Published
1997-11-01
Volume
112
Issue
4
Pages
1203-1250
ISSN
  • 0033-5533 (ISSN-L)
  • 1531-4650
DOI
10.1162/003355300555466
OpenAlex
W2041692102
Cited by
5,649
References
0
Citations by year
2026: 74 · 2025: 140 · 2024: 175 · 2023: 159 · 2022: 146 · 2021: 183 · 2020: 266 · 2019: 266 · 2018: 261 · 2017: 215 · 2016: 245 · 2015: 261 · 2014: 284 · 2013: 266 · 2012: 243
FWCI
325.00
Type
journal article
Language
en
Open access
closed
Locations
  • The Quarterly Journal of Economics (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
  • HighWire Press Open Archive (submittedVersion)
Topics
  • Social Sciences › Demography › Culture, Economy, and Development Studies
  • Physical Sciences › Computer Science › Information Systems › Economic Growth and Development
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Growth and Productivity
Keywords
economic growth, ethnic diversity, ethnic fragmentation, public policy, cross-country growth differences, sub-Saharan Africa, political instability, financial system, foreign exchange market, budget deficit, infrastructure, school education

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