Diversity and public goods: The more we mix, the better

Klaus Desmet, Joseph Flavian Gomes, Ignacio Ortuño-Ortin

17 March 2017



Ethnocentrism is ‘in’, and multiculturalism is ‘out’, in many Western democracies. The result of the 2016 presidential election in the US and the victory of Brexit in the UK partly reflect a growing unease among the electorate about living in societies that are increasingly diverse. Likewise, in continental Europe, the refugee situation in Germany is bound to become a central theme in the 2017 national elections. The National Front in France is also likely to benefit in the 2017 presidential election by relating home-grown terrorism to diversity.

Although diversity might be increasingly looked upon with suspicion, paradoxically it is often viewed more negatively in relatively homogenous places than in areas that are already highly diverse. In the Brexit referendum, the perception that there were too many immigrants was especially strong in areas with few foreign residents, and much less so in cosmopolitan London: 85% of UK districts with a lower-than-average share of foreign-born residents voted in favour of leaving the EU, compared to only 44% of the other districts (Lawton and Ackrill 2016). Past US presidential elections showed the same pattern. President Trump’s America-first rhetoric found little echo in the regions of the US with most undocumented immigrants.

These observations are consistent with contact theory. Although individuals may feel antagonism towards other groups in society, that prejudice is less strong if they interact with these groups in their daily lives (Allport 1954). At face value, this suggests that antagonism between groups in the UK would be minimised if every town mirrored the country's overall diversity. It is not clear, however, that we can say this relationship is causal, or if it generalises to the whole world.

In fact, not everyone agrees with contact theory. The proponents of conflict theory argue the exact opposite: interaction with individuals of other groups is costly and generates greater antagonism. Empirical evidence is inconclusive on which theory prevails.

One reason we should care whether local interaction mitigates or reinforces antagonism is that diverse countries tend to have more conflict, lower development, and worse public goods, and this antagonism would be an explanation. In our recent work, we develop a global database of local language use to investigate how local interaction changes the impact of a country’s overall ethnolinguistic diversity on a country’s public goods outcomes in health, education and infrastructure (Desmet et al. 2016). If it were to mitigate the negative effect of overall diversity, we would interpret this as evidence in favour of contact theory.

The theory of local interaction, local learning and antagonism

Our starting point is a simple framework to measure a country’s antagonism. Suppose that an individual feels antagonism towards another randomly chosen individual in his country if they belong to different ethnolinguistic groups. Averaging across all possible random matches yields an antagonism measure that corresponds to the standard ethnolinguistic fractionalisation index – the probability that two random individuals of a country speak a different language. For example, if we take two Belgians at random, there is a 54% chance that they have a different mother tongue.

So far we have not taken into account local interaction. Now assume that the antagonism an individual feels towards someone from another group in his country is affected by the amount of local interaction he has with people from that group. For example, the antagonism of a Dutch-speaking Belgian towards all French-speaking Belgians in his country depends on how much he locally interacts with French-speaking Belgians. We refer to this additional effect as local learning.1 Depending on whether contact theory or conflict theory dominates, local learning can either mitigate or reinforce the existing antagonism as measured by fractionalisation.

Note that not all local interaction leads to the same amount of local learning. For example, if a Dutch-speaking Belgian interacts with an Italian-speaking Belgian locally, this will not affect overall antagonism much if there are few Italian-speaking Belgians in the rest of the country. In this example, there might be a lot of local interaction, but not much local learning. Hence, what matters for antagonism is the amount of effective learning that occurs because of local interaction.

The geography of diversity

Next we measure fractionalisation and local learning in the data. Combining detailed maps from Ethnologue on 6,905 unique languages spoken, and population counts at a fine geographic resolution from Landscan, we created a global database on local language use for each 5km-by-5km grid cell in the world.

This allows us to compute fractionalisation (Figure 1) and average local learning (Figure 2) for all countries. There are many interesting differences. For example, fractionalisation is much higher in Chad than in the Central African Republic, but the reverse is true for average local learning. This is a result of more local mixing in the Central African Republic, as can be seen in Figure 3, which shows local learning for each 5km-by-5km grid cell.

Another example may be useful to clarify the difference between overall fractionalisation and local learning. While fractionalisation is virtually identical in Guatemala (0.53) and Mauritius (0.52), local learning is much lower in Guatemala. In Guatemala indigenous language speakers are concentrated in the central and northwestern highlands, and have limited contact with Spanish speakers. In contrast, Mauritians “switch languages according to the occasion in the way other people change clothes” (Chiba 2006). As a result, our index of local learning was much higher in Mauritius (0.20) than in Guatemala (0.06). 

Of course, how local learning affects a country’s overall antagonism depends on whether contact theory or conflict theory is a better explanation. If contact theory is correct, then local learning mitigates the antagonism that comes from fractionalisation. In that case, antagonism would be lower in Mauritius than in Guatemala. The reverse would be true if conflict theory were the dominant force.

Figure 1 Ethnolinguistic fractionalisation

Figure 2 Average local learning

Figure 3 Local learning

Health, education and infrastructure

Empirical research has found that ethnolinguistic fractionalisation tends to worsen public goods outcomes (La Porta et al. 1999, Alesina et al. 2003, Desmet et al. 2012). One interpretation is that antagonism makes it hard for a diverse society to agree on public goods. Different groups may fight over which language to use in education, the shape of the road network, or where to put the nation’s main hospitals.

Our discussion suggests that local learning may mitigate or reinforce the overall antagonism coming from a fractionalised society. Hence, we should take the degree of local learning into account when exploring the link between diversity and public goods outcomes. This is what we do in Desmet et al. (2016). Holding overall fractionalisation constant, we find that local learning improved a wide variety of public goods outcomes in health, education and infrastructure.

These results lend support to contact theory. The effects are large. For example, a one-standard-deviation increase in local learning lowers child mortality by 7.4 per thousand live births. To put this figure into perspective, in its effect on child mortality, a one-standard deviation increase in local learning is equivalent to a 61% increase in GDP per capita.

Before jumping to policy conclusions about local mixing, reverse causality is potentially a concern. In societies with poor public goods, individuals from the same linguistic group may prefer to cluster geographically to support each other. If so, this would lead to reverse causality, with public goods outcomes affecting the spatial sorting of individuals of different linguistic groups. To address this concern, we use an instrumental variable approach following Alesina and Zhuravskaya (2011). This allows us to conclude that there is a causal positive effect of local learning on the quality of public goods. Overall, contact theory trumps conflict theory.

Let’s mix

Going back to our earlier discussion, we can conclude that making each town mirror a country’s overall diversity would improve public goods outcomes. Although in most countries governments do not tell people where to live, there are many policies that would influence the local mixing of ethnolinguistic groups. European governments commonly use social housing to geographically spread ethnic minorities, making neighbourhoods and cities more equal in their diversity. Singapore, where more than 80% of the population lives in public housing, has a quota system ensuring that each housing block resembles the nation's ethnic make-up. In a different setting, contact theory was also an important argument in the US Supreme Court case Brown v. Board of Education, which led to the racial desegregation of public schools (Putnam 2007). Of course, these policies would be controversial, because they trade off individual freedom of choice with desirable social outcomes.


Alesina, A., A. Devleeschauwer, W. Easterly, S. Kurlat and R. Wacziarg (2003), “Fractionalization,” Journal of Economic Growth, 8, 155-194.

Alesina, A. and E. Zhuravskaya (2011), “Segregation and the Quality of Government in a Cross-Section of Countries,” American Economic Review, 101, 1872-1911.

Allport, G. (1954), The Nature of Prejudice, Reading, MA: Addison-Wesley.

Chiba, E. (2006), “English Usage in Mauritius”.

Desmet, K., J. Gomes and I. Ortuño-Ortín (2016), “The Geography of Diversity and the Provision of Public Goods,” CEPR Discussion Paper #11683.

Desmet, K., I. Ortuño-Ortín and R. Wacziarg (2012), “The Political Economy of Linguistic Cleavages,” Journal of Development Economics, 97, 322-338.

La Porta, R., F. Lopez-de-Silanes, A. Shleifer, A. and R. Vishny (1999), “The Quality of Government,” Journal of Law, Economics, and Organization, 15, 222-79.

Lawton, C. and R. Ackrill (2016), “Hard Evidence: How Areas with Low Immigration Voted Mainly for Brexit,” The Conversation.

Putnam, R.D. (2007), “E Pluribus Unum: Diversity and Community in the Twenty-First Century,” Scandinavian Political Studies, 30, 137-174.


[1]To be precise, local learning measures the probability that if someone is randomly matched with two individuals, one from his own location and one from anywhere in the country, both individuals speak a common language different from his own. For example, if a Dutch-speaking Belgian meets at random someone of his own location and someone from the country at large, what is the chance that both speak the same language but not Dutch? In the data that probability is 4%.



Topics:  Development Politics and economics

Tags:  democracy, race, ethnicity, diversity, immigration, Conflict

Altshuler Professor of Cities, Regions and Globalisation, Southern Methodist University; CEPR Research Fellow

Assistant Professor, Navarra Center for International Development, University of Navarra

Professor of Economics, Universidad Carlos III de Madrid