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Ethnic Diversity and Public Good Provision in India: An Implication for Social Discrimination
Abstract
In political economy literature, it is argued that the personal objectives of politicians differ from the public policies sought by the voters. In order to win elections, politicians sometimes get motivated to do interest group politics, which leads to social discrimination. Therefore, what determines public good provision by a government in a democratic set up? Social heterogeneity encourages governments in interest group politics and targeted transfers. Using panel data on Indian states for different years, the relationship between ethnic diversity and public good provision is tested along three measures of diversity along caste, language, and religion lines. The main conclusion of the empirical analysis of the chapter is that ethnic diversity is negatively associated with public good provision in some cases but the relationships are sometimes negative along all the three dimensions of ethnicity.
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