Hostname: page-component-cd9895bd7-lnqnp Total loading time: 0 Render date: 2024-12-23T00:52:02.690Z Has data issue: false hasContentIssue false

Globalization, Institutions, and Ethnic Inequality

Published online by Cambridge University Press:  12 April 2021

Get access

Abstract

Recent research has shown that inequality between ethnic groups is strongly driven by politics, where powerful groups and elites channel the state's resources toward their constituencies. Most of the existing literature assumes that these politically induced inequalities are static and rarely change over time. We challenge this claim and argue that economic globalization and domestic institutions interact in shaping inequality between groups. In weakly institutionalized states, gains from trade primarily accrue to political insiders and their co-ethnics. By contrast, politically excluded groups gain ground where a capable and meritocratic state apparatus governs trade liberalization. Using nighttime luminosity data from 1992 to 2012 and a global sample of ethnic groups, we show that the gap between politically marginalized groups and their included counterparts has narrowed over time while economic globalization progressed at a steady pace. Our quantitative analysis and four qualitative case narratives show, however, that increasing trade openness is associated with economic gains accruing to excluded groups in only institutionally strong states, as predicted by our theoretical argument. In contrast, the economic gap between ethnopolitical insiders and outsiders remains constant or even widens in weakly institutionalized countries.

Type
Research Article
Copyright
Copyright © The IO Foundation 2021

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Acemoglu, Daron, and Robinson, James. 2012. Why Nations Fail: The Origins of Power, Prosperity, and Poverty. Crown Business.Google Scholar
Adsera, Alicia, and Boix, Carles. 2002. Trade, Democracy, and the Size of the Public Sector: The Political Underpinnings of Openness. International Organization 56 (2):229–62.CrossRefGoogle Scholar
Alesina, Alberto, Michalopoulos, Stelios, and Papaioannou, Elias. 2016. Ethnic Inequality. Journal of Political Economy 124 (2):428–88.CrossRefGoogle ScholarPubMed
Amsden, Alice H. 1992. Asia's Next Giant: South Korea and Late Industrialization. Oxford University Press.CrossRefGoogle Scholar
Baldwin, Kate, and Huber, John D.. 2010. Economic Versus Cultural Differences: Forms of Ethnic Diversity and Public Goods Provision. American Political Science Review 104 (4):644–62.CrossRefGoogle Scholar
Bates, Robert H.. 1974. Ethnic Competition and Modernization in Contemporary Africa. Comparative Political Studies 6 (4):457–84.CrossRefGoogle Scholar
Bates, Robert H. 1981. Markets and States in Tropical Africa: The Political Basis of Agricultural Policies. University of California Press.Google Scholar
Beck, Nathaniel, and Katz, Jonathan N.. 2011. Modeling Dynamics in Time-series-cross-section Political Economy Data. Annual Review of Political Science 14:331–52.CrossRefGoogle Scholar
Bienen, Henry. 1990. The Politics of Trade Liberalization in Africa. Economic Development and Cultural Change 38 (4):713–32.CrossRefGoogle Scholar
Bienen, Henry. 1991. The Politics of Trade Liberalization. In Trade and Development in Sub-Saharan Africa, edited by Frimpong-Ansah, Jonathan H., Kanbur, S.M. Ravi, and Svedberg, Peter, 7496. Manchester University Press.Google Scholar
Bockstette, Valerie, Chanda, Areendam, and Putterman, Louis. 2002. States and Markets: The Advantage of an Early Start. Journal of Economic Growth 4 (7):347–69.CrossRefGoogle Scholar
Boone, Catherine. 1994. Trade, Taxes, and Tribute: Market Liberalization and the New Importers in West Africa. World Development 22 (3):453–67.CrossRefGoogle Scholar
Borcan, Oana, Olsson, Ola, and Putterman, Louis. 2018. State History and Economic Development: Evidence from Six Millennia. Journal of Economic Growth 23 (1):140.CrossRefGoogle Scholar
Burgess, Robin, Jedwab, Remi, Miguel, Edward, Morjaria, Ameet, and i Miquel, Gerard Padró. 2015. The Value of Democracy: Evidence from Road Building in Kenya. American Economic Review 105 (6):1817–51.CrossRefGoogle Scholar
Cederman, Lars-Erik, Weidmann, Nils, and Bormann, Nils-Christian. 2015. Triangulating Horizontal Inequality: Toward Improved Conflict Analysis. Journal of Peace Research 52 (6):806–21.CrossRefGoogle Scholar
Cederman, Lars-Erik, Weidmann, Nils B., and Gleditsch, Kristian Skrede. 2011. Horizontal Inequalities and Ethno-nationalist Civil War: A Global Comparison. American Political Science Review 105 (3):478–95.CrossRefGoogle Scholar
Center for International Earth Science Information Network (CIESIN), International Food Policy Research Institute (IFPRI), and The World Bank and Centro Internacional de Agricultura Tropical (CIAT). 2011. Global Rural-Urban Mapping Project, Version 1 (GRUMPv1): Population Density Grid. Available at <http://dx.doi.org/10.7927/H4R20Z93>.CrossRef.>Google Scholar
Chen, Xi, and Nordhaus, William D.. 2011. Using Luminosity Data As a Proxy For Economic Statistics. Proceedings of the National Academy of Sciences 108 (21):8589–94.CrossRefGoogle ScholarPubMed
Clapham, Christopher. 2018. The Ethiopian Developmental State. Third World Quarterly 39 (6):1151–65.CrossRefGoogle Scholar
Coppedge, Michael, Gerring, John, Knutsen, Carl Henrik, Lindberg, Staffan I., Teorell, Jan, et al. 2019. V-Dem Country-Year Dataset v9. Gothenburg, SWE: V-Dem Institute.Google Scholar
De Boef, Suzanna, and Keele, Luke. 2008. Taking Time Seriously. American Journal of Political Science 52 (1):184200.CrossRefGoogle Scholar
Luca, De, Giacomo, Roland Hodler, Raschky, Paul A., and Valsecchi, Michele. 2018. Ethnic Favoritism: An Axiom of Politics? Journal of Development Economics 132:115–29.CrossRefGoogle Scholar
Dell, Melissa, Lane, Nathan, and Querubin, Pablo. 2018. The Historical State, Local Collective Action, and Economic Development in Vietnam. Econometrica 86 (6):2083–121.CrossRefGoogle Scholar
Dodge, Toby. 2013. State and Society in Iraq Ten Years After Regime Change: The Rise of a New Authoritarianism. International Affairs 89 (2):241–57.CrossRefGoogle Scholar
Doner, Richard F., Ritchie, Bryan K., and Slater, Dan. 2005. Systemic Vulnerability and the Origins of Developmental States: Northeast and Southeast Asia in Comparative Perspective. International Organization 59 (2):327–61.CrossRefGoogle Scholar
Easterly, William. 2007. Globalization, Poverty, and All That: Factor Endowment Versus Productivity Views. In Globalization and Poverty, edited by Easterly, William, 109–42. University of Chicago Press.CrossRefGoogle Scholar
Evans, Peter B. 1995. Embedded Autonomy: States and Industrial Transformation. Princeton University Press.CrossRefGoogle Scholar
Franck, Raphael, and Rainer, Ilia. 2012. Does the Leader's Ethnicity Matter? Ethnic Favoritism, Education, and Health in Sub-Saharan Africa. American Political Science Review 106 (2):294325.CrossRefGoogle Scholar
Fuchang, Zhao, Chengwei, Li, and Yuan, Zheng. 2016. Report on Sustainable Financing for Poverty Alleviation in China. Chinese Academy of Fiscal Sciences Ministry of Finance and United Nations Development Program, China. Available at <http://www.cn.undp.org/content/china/en/home/library/poverty/sustainable-financing-for-poverty-alleviation-in-china.html>.Google Scholar
Fukuyama, Francis. 2011. The Origins of Political Order: From Prehuman Times to the French Revolution. Farrar, Straus and Giroux.Google Scholar
Glaeser, Edward L., La Porta, Rafael, Silanes, Florencio Lopez-de, and Shleifer, Andrei. 2004. Do Institutions Cause Growth? Journal of Economic Growth 9 (3):271303.CrossRefGoogle Scholar
Hainmueller, Jens, Mummolo, Jonathan, and Xu, Yiqing. 2019. How Much Should We Trust Estimates from Multiplicative Interaction Models? Simple Tools to Improve Empirical Practice. Political Analysis 27 (2):163–92.CrossRefGoogle Scholar
Hanlon, Joseph, and Mosse, Marcelo. 2010. Mozambique's Elite: Finding Its Way in a Globalized World and Returning to Old Development Models. World Institute for Development Economics Research All That (105):119.Google Scholar
Hannum, Emily, and Wang, Meiyan. 2012. China: A Case Study in Rapid Poverty Reduction. In Indigenous People, Poverty, and Development, edited by Hall, Gillette H. and Patrinos, Harry Anthony, 149204. Cambridge University Press.CrossRefGoogle Scholar
Harrison, Ann, McLaren, John, and McMillan, Margaret. 2011. Recent Perspectives on Trade and Inequality. Annual Review of Economics 3 (1):261–89.CrossRefGoogle Scholar
Henderson, Vernon, Storeygard, Adam, and Weil, David N.. 2011. A Bright Idea for Measuring Economic Growth. The American Economic Review 101 (3):194–99.CrossRefGoogle ScholarPubMed
Herbst, Jeffrey. 2000. States and Power in Africa: Comparative Lessons in Authority and Control. Princeton University Press.Google Scholar
Hill, Ruth, and Tsehaye, Eyasu. 2015. Ethiopia Poverty Assessment. World Bank. Available at <https://openknowledge.worldbank.org/handle/10986/21323>.Google Scholar
Hiscox, Michael J. 2001. Class Versus Industry Cleavages: Inter-Industry Factor Mobility and the Politics of Trade. International Organization 55 (1):146.CrossRefGoogle Scholar
Hodler, Roland, and Raschky, Paul A. 2014. Regional Favoritism. The Quarterly Journal of Economics 129 (2):9951033.CrossRefGoogle Scholar
Houle, Christian. 2015. Ethnic Inequality and the Dismantling of Democracy: A Global Analysis. World Politics 67 (3):469505.CrossRefGoogle Scholar
Kanbur, Ravi. 2000. Income Distribution and Development. In Handbook of Income Distribution, edited by Atkinson, Anthony and Bourguignon, F., 791841. North Holland.CrossRefGoogle Scholar
Kang, Woojin, and Imai, Katsushi S.. 2012. Pro-Poor Growth, Poverty and Inequality in Rural Vietnam. Journal of Asian Economics 23 (5):527–39.CrossRefGoogle Scholar
Kasara, Kimuli. 2007. Tax Me If You Can: Ethnic Geography, Democracy, and the Taxation of Agriculture in Africa. American Political Science Review 101 (1):159–72.CrossRefGoogle Scholar
Kedir, Abbi M. 2014. United Nations Development Programme Issue Brief: Ethiopia. Paper presented at the Pan-African Inequalities Conference, April/May, Accra, Ghana.Google Scholar
Knight, John B. 2014. China As a Developmental State. The World Economy 37 (10):1335–47.CrossRefGoogle Scholar
Langer, Arnim, and Stewart, Frances. 2012. International Trade and Horizontal Inequalities: Conceptual and Empirical Linkages. European Journal of Development Research 24 (5):665–87.CrossRefGoogle Scholar
Lynch, Marc. 2014. How Can the US Help Maliki When Maliki's the Problem? In Iraq Between Maliki and the Islamic State, 1213. The Project on Middle East Political Science.Google Scholar
Magaloni, Beatrice. 2008. Credible Power-Sharing and the Longevity of Authoritarian Rule. Comparative Political Studies 41 (4/5):715–41.CrossRefGoogle Scholar
Mann, Michael. 1993. The Sources of Social Power. Volume 2: The Rise of Classes and Nation-States, 1760–1914. Cambridge University Press.CrossRefGoogle Scholar
Michalopoulos, Stelios, and Papaioannou, Elias. 2013. Pre-Colonial Ethnic Institutions and Contemporary African Development. Econometrica 81 (1):113–52.Google ScholarPubMed
Migdal, Joel S. 1988. Strong Societies and Weak States: State-Society Relations and State Capabilities in the Third World. Princeton University Press.Google Scholar
Milanovic, Branko. 2013. Global Income Inequality in Numbers: In History and Now. Global Policy 4 (2):198208.CrossRefGoogle Scholar
Milner, Helen V., and Kubota, Keiko. 2005. Why the Move to Free Trade? Democracy and Trade Policy in the Developing Countries. International Organization 59 (1):107–43.CrossRefGoogle Scholar
National Geophysical Data Center. 2014. DMSP-OLS Nighttime Lights Time Series, Version 4. Available at <http://ngdc.noaa.gov/eog/dmsp/downloadV4composites.html>..>Google Scholar
Nickell, Stephen. 1981. Biases in Dynamic Models with Fixed Effects. Econometrica 49 (6):1417–26.CrossRefGoogle Scholar
North, Douglass C. 1990. Institutions, Institutional Change and Economic Performance. Cambridge University Press.CrossRefGoogle Scholar
Nuvunga, Adriano, and Sitoe, Eduardo. 2013. Party Institutionalisation in Mozambique: “The Party of the State” Versus the Opposition. Journal of African Elections 12 (1):109–42.CrossRefGoogle Scholar
O'Driscoll, Dylan. 2017. Autonomy Impaired: Centralisation, Authoritarianism and the Failing Iraqi State. Ethnopolitics 16 (4):315–32.CrossRefGoogle Scholar
Office of the High Commissioner of Human Rights. 2018. Committee on the Elimination of Racial Discrimination Reviews the Report of China. United Nations. Available at <https://www.ohchr.org/en/NewsEvents/Pages/DisplayNews.aspx?NewsID=23452&LangID=E>..>Google Scholar
Orre, Aslak Jangård, and Rønning, Helge. 2017. Mozambique: A Political Economy Analysis. Report Commissioned by the Norwegian Ministry of Foreign Affairs. Available at <https://www.cmi.no/publications/6366-mozambique-a-political-economy-analysis>..>Google Scholar
Østby, Gudrun. 2008. Polarization, Horizontal Inequalities and Violent Civil Conflict. Journal of Peace Research 45 (2):143–62.CrossRefGoogle Scholar
Pepinsky, Thomas. 2014. The Institutional Turn in Comparative Authoritarianism. British Journal of Political Science 44 (3):631–53.CrossRefGoogle Scholar
Piketty, Thomas. 2014. Capital in the Twenty-first Century. Harvard University Press.CrossRefGoogle ScholarPubMed
Puddington, Arch, and Roylance, Tyler. 2016. Freedom in the World 2016—Anxious Dictators, Wavering Democracies: Global Freedom under Pressure. Freedom House.Google Scholar
Rauch, James E., and Evans, Peter. 2000. Bureaucratic Structure and Bureaucratic Performance in Less Developed Countries. Journal of Public Economics 75 (1):4971.CrossRefGoogle Scholar
Rodrik, Dani. 1998a. Why Do More Open Economies Have Bigger Governments? The Journal of Political Economy 106 (5):9971032.CrossRefGoogle Scholar
Rodrik, Dani. 1998b. Why Is Trade Reform So Difficult in Africa? Journal of African Economies 7 (1):1036.CrossRefGoogle Scholar
Rodrik, Dani. 1999. Where Did All the Growth Go? External Shocks, Social Conflict, and Growth Collapses. Journal of Economic Growth 4 (4):385412.CrossRefGoogle Scholar
Rudra, Nita. 2002. Globalization and the Decline of the Welfare State in Less-developed Countries. International Organization 56 (2):411–45.CrossRefGoogle Scholar
Rudra, Nita, and Jensen, Nathan M.. 2011. Globalization and the Politics of Natural Resources. Comparative Political Studies 44 (6):639–61.CrossRefGoogle Scholar
Sautman, Barry. 1998. Affirmative Action, Ethnic Minorities and China's Universities. Pacific Rim Law and Policy Journal 7 (1):77109.Google Scholar
Scheve, Kenneth, and Stasavage, David. 2010. The Conscription of Wealth: Mass Warfare and the Demand for Progressive Taxation. International Organization 64 (4):529–61.CrossRefGoogle Scholar
Scott, James C. 2009. The Art of Not Being Governed: An Anarchist History of Upland Southeast Asia. Yale University Press.Google ScholarPubMed
Stasavage, David. 1999. Causes and Consequences of Corruption: Mozambique in Transition. Journal of Commonwealth and Comparative Politics 37 (3):6597.CrossRefGoogle Scholar
Stewart, Frances. 2008. Horizontal Inequalities and Conflict: Understanding Group Violence in Multiethnic Societies. Palgrave Macmillan.CrossRefGoogle Scholar
Tilly, Charles. 1999. Durable Inequality. University of California Press.Google Scholar
Van de Walle, Nicolas. 2009. The Institutional Origins of Inequality in Sub-Saharan Africa. Annual Review of Political Science 12:307–27.CrossRefGoogle Scholar
Verhoeven, Harry. 2016. Behind the Violence in Ethiopia. Foreign Affairs, 29 August. Available at <https://www.foreignaffairs.com/articles/ethiopia/2016-08-29/behind-violence-ethiopia>..>Google Scholar
Vogt, Manuel, Bormann, Nils-Christian, Rúegger, Seraina, Cederman, Lars-Erik, Hunziker, Philipp, and Girardin, Luc. 2015. Integrating Data on Ethnicity, Geography, and Conflict: The Ethnic Power Relations Dataset Family. Journal of Conflict Resolution 59 (7):1327–42.CrossRefGoogle Scholar
Wade, Robert. 1990. Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization. Princeton University Press.CrossRefGoogle Scholar
Weber, Max. 1978. Economy and Society: An Outline of Interpretive Sociology. University of California Press.Google Scholar
Weidmann, Nils B., and Schutte, Sebastian. 2017. Using Night Light Emissions for the Prediction of Local Wealth. Journal of Peace Research 54 (2):125–40.CrossRefGoogle Scholar
Weiner, Myron. 1978. Sons of the Soil: Migration and Ethnic Conflict in India. Princeton University Press.Google Scholar
World Bank. 2019. World Development Indicators. World Bank.Google Scholar
Supplementary material: Link

Bormann et al. Dataset

Link
Supplementary material: PDF

Bormann et al. supplementary material

Bormann et al. supplementary material

Download Bormann et al. supplementary material(PDF)
PDF 270.6 KB