Comparative Analysis of Ethnic Diversity Measures on Provisioning of Basic Public Goods: Cross Country Assessment

Ethnic diversity and provision of public goods have long been understood to share a negative relationship. While there has been a concerted effort to define and measure ethnic diversity around the world, we are interested in analyzing the possible differences in these measures when it comes to using them to explain their impact on provision of public goods. Defining public goods using a single aggregate measure or using only one variable as proxy is a vague concept. It is also unclear specifically which aspects of a country’s atmosphere tend to drive the negative relation between public goods provision and ethnic diversity. Our empirical analysis shows that given the strong impact, there is a lot of room for flexibility when choosing the ethnic diversity measure. We also introduce three new possible measures of public goods provision and by including the major basic public sectors, we conclude that the most significant negative impact of ethnic diversity is on the health and sanitation sectors.