nep-isf New Economics Papers
on Islamic Finance
Issue of 2018‒02‒19
one paper chosen by
Halimatun Aris
Bangor University

  1. The Political Boundaries of Ethnic Divisions By Samuel Bazzi; Matthew Gudgeon

  1. By: Samuel Bazzi (Boston University, CEPR, BREAD); Matthew Gudgeon (Boston University)
    Abstract: Policymakers in diverse countries face the persistent challenge of managing ethnic divisions. We argue that redrawing subnational political boundaries can fundamentally reshape these divisions. We use a natural policy experiment in Indonesia to show that changes in the political relevance of ethnic divisions have significant effects on conflict in the short- to medium-run. While redistricting along group lines can increase social stability, these gains are undone and even reversed in newly polarized units. Electoral democracy further amplifies these effects given the large returns to initial control of newly created local governments in settings with ethnic favoritism. Overall, our findings show that the ethnic divisions underlying widely-used diversity measures are neither fixed nor exogenous and instead depend on the political boundaries within which groups are organized. These results illustrate the promise and pitfalls of redistricting policy in diverse countries where it is not feasible for each group to have its own administrative unit.
    Keywords: Conflict, Decentralization, Ethnic Divisions, Polarization, Political Boundaries
    JEL: D72 D74 H41 H77 O13 Q34
    Date: 2017–12
    URL: http://d.repec.org/n?u=RePEc:bos:wpaper:wp2018-005&r=isf

This nep-isf issue is ©2018 by Halimatun Aris. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.