Media Briefings

ETHNIC FAVOURITISM BY NATIONAL LEADERS: A global phenomenon

  • Published Date: March 2016

National leaders across the world are guilty of ‘ethnic favouritism’ – channelling public resources to their own homelands. That is the central finding of research by Giacomo De Luca, Roland Hodler, Paul Raschky and Michele Valsecchi, to be presented at the Royal Economic Society's annual conference in Brighton in March 2016.

Analysing data on over 2,000 regions from 139 countries for the period 1992-2012, their study estimates that ethnographic regions enjoy 3% higher regional GDP during times when a member of their ethnic group is the country’s political leader than in other times. The researchers use night-time light intensity, a widely accepted measure of how well the local economy is doing.

The economic effects of ethnic favouritism are as strong outside Africa as inside the continent, the researchers find. For example, white presidents in Latin America tend to favour areas where the population is mostly descended from European settlers, but this shifts after indigenous leaders are elected, such as Evo Morales in Bolivia.

What’s more, ethnic favouritism is unrelated to the level of development of a country’s economy, happening in both rich and poor countries. But it is not sustainable: when one leader is replaced by another, the light levels in the first one’s homelands drop as though they had never been favoured in the first place. But the overall message is rather pessimistic, the authors conclude:

‘Our results suggest the need to understand better what institutional designs may help to curb ethnic favouritism, or – even better – to induce different ethnic groups to work together.’

‘After all such institutional designs are possible: Switzerland is an ethnically highly segregated country, but there is no evidence for ethnic favouritism thanks to its inclusive form of government with its presidency that rotates between different political parties and ethnic groups.’

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It is generally accepted that sub-Saharan African politics partly operates on the basis of ethnic favouritism: political leaders in office are assumed to channel resources disproportionately towards areas populated by their own ethnic group.

In Kenya, for example, both the Kalenjin-dominated government around Daniel arap Moi, who was president from 1978 to 2002, and the Kikuyu-dominated government around Mwai Kibaki, who was president from 2002 to 2013, engaged in massive corruption and ethnic favouritism, as Michaela Wrong illustrates in her book entitled ‘It's our Turn to Eat.’

This study looks at ethnic favouritism around the globe. Based on a sample of 2,022 ethnographic regions from 139 multi-ethnic countries during the period 1992-2012, the researchers estimate that ethnographic regions enjoy 3% higher regional GDP in times in which a member of their ethnic group is the country’s political leader than in other times. To estimate this effect, the authors rely on a well-established association between local GDP and night-time light emissions.

The effect is as strong outside Africa as it is in Africa itself. For example, Latin American generally white presidents tend to favour areas populated by European descendants and criollos, largely at the expense of the indigenous population. Night-time light in indigenous areas, however, increased substantially after the election of indigenous leaders, such as Evo Morales in Bolivia.

These findings challenge the preconception that ethnic favouritism is mainly or even entirely a sub-Saharan African phenomenon. Instead they suggest that ethnic favouritism holds globally.

Further, the results suggest that the prevalence of ethnic favouritism is not related to the level of economic development, operating both in rich and poor countries. Perhaps more surprisingly, the researchers find that more democratic institutions only have a weak effect on reducing ethnic favouritism. But this result seems to be driven mainly by countries that switched from autocratic regimes to weak democracies, whereas more mature democracies appear to curb the problem more successfully.

Comparing countries with different ethnic compositions, the researchers find that the geographical concentration (ethnic segregation) and the number of ethnic groups (ethnic fractionalisation) are both associated with more ethnic favouritism. Hence, ethnic favouritism tends to be most prevalent in countries with many small ethnic groups, and where ethnic groups are geographically clustered, which is likely to facilitate targeted benefit distribution policies.

Finally, the study looks at whether night-time light remains more intense in the ethnic homelands of a former political leader who was recently replaced by a political leader from another ethnic group. The researchers find that night-time light intensity drops quickly to the level that it would experience if the ethnographic region had never been the political leader’s ethnic homeland.

This finding clearly suggests that ethnic favouritism does not foster sustainable development. A possible reason could be that most public funds flowing to the political leader’s ethnic homeland are used for consumption purposes rather than investment in infrastructure. This would follow a patronage logic, according to which co-ethnics in the population are more likely to support the current political leader when the stream of benefits depend on his continued presence in power.

Another possible reason could be that investments in the political leader’s ethnic homeland do not receive sufficient follow-up funding from successors belonging to different ethnic groups.

Overall, the message is rather pessimistic and it suggests the need to understand better what institutional designs may help to curb ethnic favouritism, or – even better – to induce different ethnic groups to work together. After all such institutional designs are possible: Switzerland is an ethnically highly segregated country, but there is no evidence for ethnic favouritism thanks to its inclusive form of government with its presidency that rotates between different political parties and ethnic groups.

ENDS


Ethnic Favouritism: An Axiom of Politics? By Giacomo De Luca, Roland Hodler, Paul Raschky and Michele Valsecchi