Corruption, growth and ethnolinguistic fractionalization: a theoretical model

<font size="2" face="CMR10"><font size="2" face="CMR10">This paper analyzes the existing relationship between ethnolinguistic fractionalization, corruption and the growth rate of a country. We provide a simple theoretical model. We show that a non-linear relationship between fractionalization and corruption exists: corruptionis high in homogeneous or very fragmented countries, but low where fractionalization is intermediate. In fact, when ethnic diversity is intermediate, constituencies act as a checkand balance device to limit ethnically-based corruption. Consequently, the relationshipbetween fractionalization and growth rate is also non-linear: growth is high in the middle range of ethnic diversity, low in homogeneous or very fragmented countries.</font></font>