Economic Benefits of Ethnolinguistic Diversity

Prevailing interpretation in international political economy following the work of such analysts as Easterly and Alesina, is that ethnic and linguistic diversity is harmful to economic development because it is a source of division and even destructive political conflict. This study takes a very different view. It argues that ethnic and linguistic diversity is a source of creativity and productivity in society and therefore is an indispensable component of economic development. Based on an examination of advanced-industrial (OECD) countries, this is the first study to show at the macro-level across countries that ethnic and linguistic diversity is a positive source of creativity for society. Extensive econometric analysis backs up the empirical findings of the study. This work promises to steer international political economy in a new direction. It will highlight the positive contributions to entrepreneurship, technological innovation, and economic growth in the modern society of the Information Age. An important qualification of the findings is that the study shows how important government support is for research and development. Without this support much of the creativity in society in terms of skill and manpower gets lost or wasted. This book is original and groundbreaking. It adds a new dimension to the fields of international political economy and international political finance.