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Quarterly Journal of Economics Vol. 114 No. 4 1999

Public Goods and Ethnic Divisions

A. Alesina1,2,3,4; R. Baqir5,6; William Easterly7

1 National Bureau of Economic Research · 2 Harvard University · 3 Centre for Economic Policy Research · 4 Massachusetts Institute of Technology · 5 International Monetary Fund · 6 University of California, Berkeley · 7 New York University

open access

Abstract

We present a model that links heterogeneity of preferences across ethnic groups in a city to the amount and type of public goods the city supplies. We test the implications of the model with three related data sets: U. S. cities, U. S. metropolitan areas, and U. S. urban counties. Results show that the shares of spending on productive public goods—education, roads, sewers and trash pickup—in U. S. cities (metro areas/urban counties) are inversely related to the city's (metro area's/county's) ethnic fragmentation, even after controlling for other socioeconomic and demographic determinants. We conclude that ethnic conflict is an important determinant of local public finances.

DOI
10.1162/003355399556269
Volume
114
Issue
4
Pages
1243-1284
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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