Essays on the Economics of Ethnolinguistic Differences Andrew C. Dickens A DISSERTATION SUBMITTED TO THE FACULTY OF GRADUATE STUDIES IN PARTIAL FULFILLMENT OF THE REQUIREMENTS for the degree DOCTOR OF PHILOSOPHY GRADUATE PROGRAM IN ECONOMICS YORK UNIVERSITY TORONTO, ONTARIO APRIL 2017 c Andrew C. Dickens, 2017 Abstract In this dissertation, I study the origins and economic consequences of ethnolinguistic differences. To quantify these differences, I construct a lexicostatistical measure of linguistic distance. I use this measure to study two different outcomes: ethnic politics and cross-country idea flows. I then take the economic importance of ethnolinguistic differences as given, and explore the geographic foundation of these differences. In chapter 1, I document evidence of ethnic favoritism in 35 sub-Saharan countries. I use lexi- costatistical distance to quantify the similarity between an ethnic group and the national leader’s ethnic identity. I find that a one standard deviation increase in similarity yields a 2 percent in- crease in group-level GDP per capita. I then use the continuity of lexicostatistical similarity to show that favoritism exists among groups that are not coethnic to the leader, where the mean ef- fect of non-coethnic similarity is one quarter the size of the coethnic effect. I relate these results to the literature on coalition building, and provide evidence that ethnicity is a guiding principle behind high-level government appointments. In chapter 2, I use book translations data to capture cross-country idea flows. It has been conjectured that income gaps are smaller between ancestrally related countries because they com- municate more ideas. I provide empirical support for this link and a deeper understanding of the hypothesized mechanism: population differences do exhibit a negative relationship with the diffusion of ideas, with the caveat that this negative relationship operates across linguistic lines. After accounting for the linguistic distance between two countries, I find that dissimilar popula- tions communicate more ideas. In chapter 3, I study the geographic origins of ethnolinguistic differences. I construct a novel dataset to examine the border regions of neighbouring ethnolinguistic groups, together with varia- tion in the set of potentially cultivatable crops at the onset of the Columbian Exchange, to estimate how agricultural diversity impacts linguistic differences between neighbouring groups. I find that ethnic groups separated across agriculturally diverse regions are more similar in language than groups separated across homogeneous agricultural regions. I propose that historical trade in agriculturally diverse regions is the mechanism by which group similarities are preserved. ii Dedication To Meghan, for your steadfast encouragement and support throughout the years. You have made my life better in more ways than I could ever articulate to you, and undoubtedly my work is better off as a result. Your daily inspiration is the footing upon which I have found my stride as a researcher. To my parents, Wenda and Greg, you have instilled in me an appreciation of knowledge. Thank you for believing in me, and always encouraging me to go after my dreams in life – aca- demic and otherwise. My education would not have been possible without the opportunities that you provided for me, and I am forever grateful that I am where I am today because of you. To my sister, Claire, I have always admired your curiosity and enthusiasm. You have inspired these qualities in me, without which I would not have seen this dissertation through to comple- tion. You have always been my ally and I thank you for your unwavering support. iii Acknowledgements I am indebted to my supervisor, Nippe Lagerlof,¨ for his unwavering support of my ideas, for his ability to always push me towards my intellectual frontier, and for the countless hours of his time he spent with me discussing my research. My dissertation would pale in comparison without his invaluable supervision, his contribution to my academic development and his friendship. My development as a researcher would also not have been the same without the help of Tasso Adamopoulos. Throughout many meetings over the course of my dissertation, he has offered perspective and encouragement that has directly contributed to how I think about economic prob- lems. I am truly grateful for all the excellent advice Tasso has given me about my research and about how to succeed as an economist. I owe a huge thanks to Ben Sand for guiding me through the world of econometrics. My un- derstanding and appreciation of empirical methods would not be the same without Ben’s wealth of knowledge. In addition to his fantastic comments and suggestions about my work, Ben has spent hours of his time helping me understand the answer to my many questions over the years. Many other members of the department have contributed to my dissertation and provided an environment that was conducive to my academic development. A special thanks to Berta Esteve- Volart for reading and commenting on many drafts of my work, and for always providing excel- lent comments during or after one of my seminars. Other faculty members that have contributed to my dissertation and always given me their time, even though not on my committee, include Ahmet Akyol, Sam Bucovetsky, Avi Cohen, Wai-Ming Ho, Fernando Leibovici, Uros Petronijevic, Laura Salisbury and Andrey Stoyanov. And a big thanks to my classmate, Andrew Hencic, for always hearing out my daily research problem on the subway ride home from campus. An additional thanks to the many discussants and seminar participants that have contributed to my dissertation, in particular James Fenske for providing extensive comments on my job market paper. A special thanks also goes to Oded Galor for hosting my Visiting Research Fellowship at Brown University in 2015. My time at Brown was the most memorable experience of my graduate studies, and I thank those that I met who contributed to my dissertation, including Greg Casey, Mario Carillo, Raphael¨ Franck, Stelios Michalopoulos, Omer¨ Ozak,¨ Assaf Sarid and David Weil. Last, but definitely not least, I am thankful for my friends who have made Toronto home for me. Having a group of friends who support and encourage me – away from work – has been instrumental to my productivity and focus over the past six years. This dissertation would not be the same without them. iv Table of Contents 1 Ethnolinguistic Favoritism in African Politics1 1.1 Introduction..........................................1 1.2 Data...............................................7 1.2.1 Language Group Partitions.............................7 1.2.2 Satellite Imagery of Night Light Luminosity...................8 1.2.3 Assignment of a Leader’s Ethnolinguistic Identity................8 1.2.4 Linguistic Similarity.................................9 1.2.5 Patterns in the Data.................................. 12 1.3 Empirical Model........................................ 14 1.3.1 Identification of Linguistic Similarity....................... 15 1.4 Benchmark Results...................................... 16 1.4.1 What Drives Favoritism?.............................. 24 1.5 How Is Patronage Distributed?............................... 25 1.5.1 DHS Individual-Level Data............................. 28 1.5.2 Locational and Individual Similarity Estimates.................. 29 1.6 Discussion: Coalition Building............................... 30 1.7 Concluding Remarks..................................... 34 2 Population Relatedness and Cross-Country Idea Flows 36 2.1 Introduction.......................................... 36 2.2 Data............................................... 40 2.2.1 Measuring Language Distance........................... 40 2.2.2 Measuring Genetic Distance............................. 42 2.2.3 Book Translations as Idea Flows.......................... 42 2.3 Methodology and Empirical Results............................ 45 2.3.1 Econometric Model.................................. 45 2.3.2 Unconditional Benchmark Results......................... 45 2.3.3 Conditional Benchmark Results.......................... 48 2.4 Robustness........................................... 50 2.4.1 Testing the Home Country Assumption of Book Translations......... 50 v 2.4.2 Human Capital.................................... 54 2.4.3 Existing Bilateral Relationships........................... 56 2.4.4 Check for Understated Standard Errors...................... 57 2.4.5 Differences in Across Country Language Structure............... 57 2.5 Distance Effects by Idea Types................................ 60 2.6 Concluding Remarks..................................... 61 3 Ecology, Trade and the Geographic Origins of Ethnolinguistic Differences 63 3.1 Introduction.......................................... 63 3.2 The Columbian Exchange.................................. 66 3.3 Data............................................... 66 3.3.1 Linguistic Distance.................................. 66 3.3.2 Independent Variables................................ 67 3.3.3 Does Geography Delineate Ethnolinguistic Groups?............... 69 3.4 Empirical Strategy and Estimates.............................. 70 3.4.1 Identification Strategy................................ 70 3.4.2 Empirical Model and Results............................ 70 3.5 Concluding Remarks..................................... 77 Bibliography 80 A Language Appendix 89 B Chapter 1 Appendix 92 C Chapter 2 Appendix 119 D Chapter 3 Appendix