The Causal Effect of Ethnoracial Demography on Public Outcomes

• In Event: Comparative Latin American Politics: Short-term Dynamics and Long-term Processes

Abstract

What is the relationship between ethnoracial demography and public outcomes? A considerable amount of work in political science and economics builds on the hypothesis that high levels of ethnic diversity lead to the ‘underprovision’ of public goods and other inefficient public outcomes. Despite the scarcity of support for a causal link, the sheer number of studies showing diversity to harm provision sufficed to convince the most skeptical of readers. These earlier findings, however, have been challenged both empirically and theoretically. Most prominently, recent studies demonstrate that “diversity deficit” may simply be a statistical artifact and that, in fact, more homogeneous communities of disadvantaged ethnic groups tend to have lower provision (e.g., Abascal and Baldassarri 2015; Kustov and Pardelli 2018). In this paper we aim to contribute to this growing literature by investigating whether this recently uncovered association is indeed causal using contemporary and historical data from Brazilian municipalities.

In doing so, we use a new purpose-built dataset of 5,505 Brazilian municipalities across time, including a variety of racial demography, public goods, and economic geography variables. Overall, we show that the contemporary negative association between the racial composition of municipalities and public outcomes in part traces their origins to the distribution of state’s presence more than 100 years ago. Municipalities that were located in hard-to-reach areas of the country in the end of the 19th century, today display higher shares of Afro-Brazilian population and are more likely to provide lower-quality public goods—despite comparable amounts of spending to their counterparts.

To explain these results, we provide evidence that disadvantaged Afro-Brazilian groups tended to concentrate precisely in the geographical areas where the state was scarcely present by the end of the nineteenth century, and were less likely to migrate. By exploiting variation in the geocoded location of quilombos (historic slave exile communities), as well as in the local prevalence of slavery in the past, our results indicate that suboptimal outcomes are less a product of adverse intergroup relations than of path-dependent processes of state development. Insofar as the distribution of ethnic groups across the national territory overlaps with areas of historically low state presence, disadvantaged group shares are more likely to be systematically tied to lower provision in contemporary municipalities. In the end, our results contradict the idea that an exogeneous change in ethnic demographic composition of a community can in itself lead to underprovision of public goods.

Authors

• Alexander Kustov, Yale University

• Giuliana Pardelli, New York University Abu Dhabi