Public Goods, and Nested Subnational Units: Diversity, Segregation, or Hierarchy?

Sumit Mishra , Institute for Financial Management and Research
Naveen Bharathi, Indian Institute of Management Bangalore
Deepak Malghan, Indian Institute of Management Bangalore
Andaleeb Rahman, Cornell University

We develop a general multi-scale diversity framework to account for spatial segregation of hierarchically-ordered ethnic groups residing in politically and administratively nested geographic aggregations. We explicate how ethnic diversity, ethnic segregation, and ethnic hierarchy interact with the public goods catchment area" to cast doubt on extant hypotheses linking diversity and public goods provisioning. We not only show how the celebrated "diversity debit" relationship is incomplete at best but also call into question the more recent literature that posits a positive association between ethnic segregation and public goods. We test our framework using a large national census dataset containing ethnicity information (aggregate caste categories) for nearly 830 million rural residents in India. We show how not accounting for the spatial structure of diversity, segregation, and hierarchy biases empirical models of diversity and public goods.

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 Presented in Session 8. Economy, Labor Force, Education, & Inequality