The Economist on Diversity and Development
I was looking for information on how cultures affect growth and stumbled on this 12.5 year old article in The Economist:
Diversity and development might seem to sit oddly together. But they are intimately linked, and the report seeks to show that they are not related in the way many people assume. The UNDP’s press release says unambiguously that “there is no evidence that cultural diversity slows development”, and dismisses the idea that there has to be a trade-off between respecting diversity and sustaining peace. Some of the world’s richest and most peaceful countries are historically multi-ethnic, such as Switzerland, Canada and Belgium. And most of the world’s richest countries are now the destination of immigrants from around the world, making America, Britain and other wealthy nations hugely diverse.
I imagine if you make a movie whose cast is perfectly representative of the population of diverse Switzerland or Belgium of a decade ago when this article was written, and the movie was a masterpiece, it would run afoul of #oscarssowhite.
But there is some evidence that diversity has costs. In a recent book, “The Size of Nations” (see article), two economists show that managing ethnic diversity is expensive, as governments must deal with the demands of groups competing for scarce resources. In the United States, a study has shown that people are willing to pay more for services like education if they can live with people more like them in ethnicity and class. In other words, people place a value on being with others like them. Multi-ethnic nations have been breaking apart recently (the Soviet Union, Yugoslavia); few countries have merged during the same period, and those that have were ethnic mates (East and West Germany, North and South Yemen).
A quick look at the Human Development Index (HDI), released each year in the report, seems to support the idea that diversity has its costs. In the bottom 35 countries ranked as having “low human development”, all but three are in vastly diverse Africa, where borders drawn by colonialists showed no respect for tribal, linguistic or religious identities. Meanwhile, while single-ethnicity states are rare (just 30 countries in the world do not have a religious or ethnic minority that constitutes at least 10% of the population), they are strongly represented at the top of the HDI: places like Norway, Sweden, the Netherlands, Japan, Ireland and Austria.
The article continues:
The report recommends several political strategies for coupling diversity and development. One is “asymmetrical federalism”—the type of constitutional arrangement seen in Spain and Canada, where regions dominated by a cohesive minority (like Québec or the Basque country) get special local-government powers that others do not. This both recognises the region’s distinct identity and binds it to the central state. After all, the authors point out, most people in Spain’s minority regions see themselves as both Spanish and Basque (or Catalan or Galician)—not just one or the other. Giving those overlapping identities constitutional form can be one way to stabilise a diverse country. However, it can also give rise to resentment among the majority—be they anglophone Canadians or Castilian Spaniards—over the privileges of minorities.
My guess is this works only as long as the Quebecois mostly continue to live in a geographic distinct area. In other words – where diversity however it is measured exists at a macro but is minimized at a micro level. I imagine living and working together in a way that forms elite teams requires an approach that does more to smooth out whatever differences are perceived to exist and treat everyone as the same. (Warning – Youtube & profanity.)
The authors of the report argue for several other policies to protect and promote what they call “cultural liberty”, with certain caveats. For example, they support affirmative action, which, they say, has led to an increase in the number of black professionals in America, and has helped ethnic Malays in Malaysia and various minorities in India as well. But they lightly question the wisdom of letting such policies become entrenched, asking for example whether the children of affirmative action’s beneficiaries should themselves be eligible for a helping hand.
I suspect that such programs are very, very hard to dismantle. Differing cultural traits (which necessarily exist as long as people are assisted in keeping apart) will result in different outcomes, and different outcomes are a justification for keeping these programs intact.
The authors also propose treating “cultural goods” differently from other kinds when discussing trade. They give some of the oft-cited statistics about the cultural dominance of a few countries—for example, that America accounts for 85% of films screened worldwide. Their assumption is that, left to raw market forces, products from smaller cultures would be drowned out of the market. But rather than proposing restrictions on, say, importing American films, the authors propose allowing governments to take positive action to boost the production of their local fare. (Some trade agreements treat such support as an illegal subsidy.)
This must work because movies hav a discernible effect on the culture in different countries. Typical goods like the Honda Civic, Sony Walkmen, SAP ERP, AK-47, Google’s search engine and Coca-Cola must be very unlike movies and have no discernible effect on any country’s culture.
While the report is full of feel-good language and social-science jargon, like “participation exclusion” and “living mode exclusion”, it is an interesting first stab at marrying diversity and development, two subjects not often found side-by-side. The report is, by its own admission, short on data about just how bad the problem of cultural exclusion is around the world. But it estimates, probably not too wildly, that one in seven people in the world is a member of some kind of disadvantaged minority. When engineering a new constitution, founding fathers in Iraq, Afghanistan and other nations under construction, as well as those who would advise them, would do well to take the suggestions of this report to heart.
And I predict that as long as society encourages people to think of themselves as distinct from their neighbors, and their neighbors as distinct from themselves, we will only increase the number of people who are members of what the Economist calls “some kind of disadvantaged minority.”
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Updated to include comments on Swiss and Belgian diversity. Also, second blockquote was not originally shown as quote. Also minor changes in one sentence for clarity.
“In other words, people place a value on being with others like them.”
I think that pretty well sums this whole thing up.
EMichael,
That is not my statement. That quote came from the article.
Having lived abroad a third of my life, and living in a very culturally diverse area now, I enjoy the variety that comes from exposure to different cultures. I read material in multiple languages from different parts of the world, and I’d estimate a sizable share of the movies I watch are foreign. Unlike, say, most people who shrilly yell “racist” at everything that moves.
But I also recognize that in this way, I am in the minority. The Economist is right. Most people want to live where their culture is dominant. That seems especially true of people who yell “racist” at everything that moves.
I’ve also noticed – perhaps because I have this much exposure – that different cultures result in different outcomes to social and economic conditions. And most people want to have better outcomes. Which means selectivity about what cultural values it is wise to adopt.
One other thing I’ve noticed – some cultures seek to impose their will on everyone. Some are live and let live. Which leads to the whole moderation in defense of liberty quote…
“Most people want to live where their culture is dominant. That seems especially true of people who yell “racist” at everything that moves.”
Seriously?
EM:
“Elysium” In the year 2154, the very wealthy live on a man-made space station while the rest of the population resides on a ruined Earth. A man takes on a mission that could bring equality to the polarized worlds.
EMichael,
What exactly are the cultural differences between the place you live in now and the place where you were born and grew up? You are voting with your feet. What are you voting for?
A follow-up comment. Even people who go abroad for opportunity or safety tend to seek out people who have made the same trek. Here in Long Beach, CA, I bike through Cambodia Town on my way to the beach. You don’t get a Cambodia Town unless people deliberately seek out other people like themselves. When I was a kid, I was an American expat in South America. American families would pass around video tapes of American tv. American commercials were very popular among American middle schoolers in Brazil.
My best friend and I had what was considered an odd hobby among our middle- and high-school expat peers because we occasionally get on a city bus and go off to various parts of the city. I learned a lot both from doing it, and from the reaction of the other kids in my circle.
That seems especially true of people who yell “racist” at everything that moves.”
The contrast between your personal cosmopolitan experience and your one-dimensional comments about people who question your writings would be comical if it weren’t so pathetic. Instead of inventing straw men and props to justify your POV, why not let your arguments stand or fall on their own merit?
Joel,
In comments to my posts showing that immigrants from different countries have different average economic outcomes in the US I have been called a racist. It isn’t a straw man to say people are using the word “racist” if they are using the word “racist.”
And by extension, you personally represent “everything that moves.” Good to know.
The Economist article Kimel cites is actually about the book “Size of a Nation” (Jan 2005). The book can be summed up generally as being an economic analysis of the fundamental differences in sizes of nations with the overview that (according to several reviews and other articles on the book:
“…authors’ basic argument is simple; some public goods are cheaper when provided on a large scale, which makes big states more efficient; on the other hand citizen preferences are more heterogeneous in larger states – they can be more easily reconciled in smaller ones. The authors posit that there is an optimal size somewhere between the extremes, determined by this efficiency / cohesion tradeoff. ”
(source is a reviewer’s more concise statement on Amazon Book Review).
Here’s a more comprehensive paper (than the Economist article and Kimel’s excerpts from it) on the topic discussing the author of the same book (Size of a Nation) from his paper in 2003 “The Size of Countries: Does it Matter?)
The overall premise is that there’s an economic trade-off between diversity and nation size. Of course larger nations have more diverse groups within them unless they have undertaken to annihilate or otherwise purge the minorities. Diversity creates political trade-offs which by and large insure the majority group(s) have, retain, and increase their benefits at the expense (of course) of the minority groups. Yet too much suppression of the minorities results in a failed state or revolution or civil wars (or genocide or mass incarcerations and a police state ), increasing costs and reducing economic growth and benefits.
In relation to Kimel’s excepts from the Economist and Kimel’s own comments on those excerpts, the implication is that diversity is not conducive to a nation’s economic advantage. therefore what? Reducing diversity by what means? Increasing more immigration from nations that are similar in race religion, & customs to make the minorities with diversity an even lower minority? or what?
Sorry, I forgot to more comprehensive Harvard article on the subject and author’s premise: https://dash.harvard.edu/bitstream/handle/1/4551794/alesina_size.pdf?sequence=2.
I recall our famous 3rd President (Jefferson) toying with the means of elimination the racial diversity created by slaves by shipping them all back to Africa… which he rejected only because it was too expensive.
I also recall as certain European nation reducing racial diversity by genocide, prohibiting minority races from procreating, & incarcerating and enslaving other diverse groups.
And we shouldn’t forget our own nation’s efforts at reducing diversity in the 17th century …. putting them in concentration camps we called “reservations”, and generally annihilating them by warring against a stone age people.
And then of course there’s the 100 years of Jim Crow after our Civil war which suppressed one racially diverse minority. Come to think of it there’s still a larger proportion of states that continue to this end where-ever they can get away with it.
longtooth:
Are you attempting to highjack this thread?
No, of course not. Why do you ask?
Longtooth:
You have 4 posts in a row which leads me to believe such. Some people (abusers) do it. Some times around here, it is like herding cats. So when I see it, I say something. Thanks!
Mike,
I can tell you that my current choice of residence has absolutely nothing at all to do with culture in any way, shape or form.
I can also tell you that in my entire life I have never given a single solitary thought to the culture of my neighbors.
Well. there was that time a decade ago when a Cowboy fan lived across the street, but I don’t think that is what you are talking about.
EM:
Work played a larger issue for myself.
FWIW if you’re interested in more evidence on some of the costs of ethnic diversity–from cross-country regressions, human resources research, and experimental economics–I did a podcast with The Economics Detective on this a few months ago.
Bill Easterly’s cross-country work on this is particularly valuable, and I think a lot of people will be surprised by the absence of evidence that rising diversity predicts higher firm performance.
Garett:
Welcome to AB.
Garett,
Thanks for the comment. FWIW I was toying with the idea of looking diversity v. firm performance after seeing a study by McKinsey showing the politically desirable result. I am always leery when contortions are needed to arrive at a result. I am going to guess that for an established result, whatever benefits or costs there are for diversity are minimal.
I will listen to your podcast.
So I did read another of your posts and while your motives remain suspect in my mind, there are certainly costs involved in diversity, almost all caused by people fighting against it. While I do not know how much was true and how much was entertainment, I watched the American movie “Hidden Figures” a couple of days ago which if true suggested America might have lost the space race to the Russians if not for the efforts of three African American women–I have no doubt that white men could have gotten us to the moon, but I wonder how long it would have taken and whether Americans would have had the fortitude to stick with it. Certainly if true that during much of the time that the real math genius was figuring out the math to put a man in orbit and bring him back alive, she had to walk/run to the colored restroom half a mile away, her productivity was impacted and the whole project was delayed. Similarly, the time it took for another African American woman to be permitted to attend evening classes at a segregated school so she could become the first female engineer at NASA undoubtedly had a cost. Significantly, while I am old enough to recall segregated restrooms and drinking fountains–they were called bubblers in Wisconsin–and focused on the racism of the early 60’s depicted in the movie, my wife who grew up in England and Canada focused on the sexism of that time period. See the advantages of diversity? Many of the supporters of the man who will take the oath of office as the next president of the United States tomorrow are the very same people who want to return to the time of Jim Crow and women being barred from all but the most menial jobs as a way “To Make America Great Again”. Of course they also want to keep out immigrants who do not talk, look or believe in their God and consider themselves more patriotic than those Americans who try and approach issues from a factual standpoint even when the facts do not support the notion of American exceptionalism. The fact is that diversity makes life more enjoyable in literally every way imaginable from food, music, art, sport, philosophy to productivity and income. The costs are all associated with people’s resistance to it. As to people calling you a racist, I have taken a very dim view of some of your posts–particularly your efforts to justify the racist acts of white policemen killing unarmed African Americans–but I do not recall calling you a racist as opposed to carrying water for them. If I did I apologize because I do not know what you really think, but will note that many of your recent posts cherry pick data to suggest that our soon to be lunatic president is at least somewhat fact based–he is not. Finally, while people undoubtedly like to live and associate with their “tribe”, IMHO the biggest factors are income and political viewpoint. I know I was much happier living in a middle class suburb of Milwaukee which voted 70-80% Democratic, where my kids went to school with children of all races and ethnic backgrounds and my neighbors–were gay, African American and Mennonite than I am living in Northeast Indiana where all all my neighbors are white, mostly heterosexual, upper income Republicans. And I only moved here because my wife wanted to be closer to grandchildren.
Terry,
Very nice.