Culture or cash?
What appears to be a demand for ethnic justice or liberation based on identity
(conflict caused by cultural divisions) may be better interpreted as,at root, an
attempt to control lucrative resources. In Zaire copper and diamonds are
concentrated in the South-east; the secessionist Katanga movement was
formed in this region shortly after independence. In Nigeria oil discoveries
were concentrated in the South-east; the secessionist Biafra movement was
formed in this region in 1967. In Ethiopia the richest area was the coastal belt
which later gained independence as Eritrea. Here it could easily be argued that
ethnicity is secondary to geography (Collier et al.,2001).
Cultural divisions: cause or effect?
The third criticism sees these empirical studies as having forgotten to consider
the big question of cause and effect. Finding that ethnic or any other form of
diversity is related to poor economic outcomes says nothing about the direc-
tion of causation. In both the historical and contemporary world the poorest
countries tend to be the most diverse. Self-sufficient subsistence agriculture
and the poor infrastructure and communications typical of those poorest coun-
tries imply the separation and isolation of small communities and consequent
linguistic and cultural diversity. Modern economic growth, migration, urban-
ization,mixing in schools and the labour market,and exchange being increas-
ingly based through the market rather than kinship groups leads to mixing and
the emergence of a national culture. Chapter 9 gave the example of nineteenth-
century France where the expansion of the central state, spread of education, a
national language and symbols such as the national anthem led to the creation
of France. Returning to Easterly and Levine (1997) we can then argue that
poor policy choices led to slow economic growth which in turn perpetuated
cultural and linguistic diversity.
Institutions as a solution?
Institutions that give protection to legal minorities, guarantee freedom from
expropriation, grant freedom from repudiation of contracts, and facilitate
cooperation for public services would constrain the amount of damage that one
ethnic group could do to another and prevent one ethnic group from expropri-
ating the incomes and wealth of another. Such institutions could make a given
degree of ethnic fractionalization less damaging for development. There is
empirical evidence to show that in countries with very highly developed insti-
tutions ethnic diversity does not significantly undermine the quality of
economic policy (Easterly, 2001a). The big problem is that the measure of
institutions is negatively correlated with ethnic division. So the dilemma is:
where can such diverse countries acquire those strong institutions?
In every society affected by social change new groups arise to participate in
politics. These groups can gain entry into politics without being part of estab-
lished political organizations; in a more institutionalized political system, polit-
ical socialization impels changes in the attitudes and behaviour of politically
262 Patterns and Determinants of Economic Growth