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Fractionalization and Long-Run Economic Growth: Webs and Direction of Association between the Economic and the Social – South Africa as a Time Series Case Study

Author(s)
Johannes Fedderke and John Luiz
Publication date
September 2006
Recent cross sectional growth studies have found that ethnolinguistic fractionalization is an important explanatory variable of long-run growth performance. In the present paper we follow the call of earlier studies to conduct a more detailed clinical analysis of the growth experience of a specific country. South Africa constitutes an interesting case in which to explore these questions. The results of this study provide important nuance to the existing body of evidence. We find that fractionalization is subject to strong change over time. In addition, we find strong evidence of webs of association between the various social, political and institutional dimensions. Thus various forms of social cleavage tend to go hand in hand which presents the danger of spurious inference of association. Further, the direction of association in the preponderance of cases runs from economic to social, political and institutional variables, rather than the other way around. However, there remain significant impacts from some, but only some fractionalization indexes on economic growth. Which social cleavage, when, how and for what period of time will depend on the historical path of specific societies.
Publication PDF
Series title
Working Paper 022
Journal
2007, Applied Economics, 39, 1037-52