Count ethnic divisions, not bombs, to tell if a nation will recover from war

Boundaries between many countries of the Middle East, like those in Africa, were haphazardly put together in negotiations by European colonisers who had little regard for ethnic realities. Indeed, they sometimes even lumped enemies together on purpose, hoping that ethnic hatreds might reduce anti-colonial feelings.

In a new study, three economists – Alberto F. Alesina and Janina Matuszeski of Harvard University and William Easterly of New York University – document how important internal cohesion is for the health of a society:

The governments in these countries are often run to benefit one ethnic group at the expense of the others and are prone to corruption.

If you have a lot of people who would prefer to be part of the neighbouring country, they tend to spend their time fighting the government rather than improving schools and building roads.

The fact that these groups do not trust one another makes them less willing to invest in social capital or even to conduct basic market transactions with one another.

Viewed from this perspective, the long-term economic prospects for Afghanistan and Iraq do not look good, says Austan Goolsbee, professor of economics at the University of Chicago Graduate School of Business. It is not the destruction of war. That will end and the countries can be rebuilt. It is the fragmentation and ethnic hatred. That, typically, never goes away.

Iraq, especially, is a straight-edged, ethnically partitioned nation wracked with internal strife. And having oil wealth is unlikely to save the day. Fragmented countries with natural resources often do worse because civil war rages over who gets to keep the money. Some of the poorest countries in Africa, for example, are actually quite well endowed with diamonds and other resources, says Goolsbee.

Source: Austan Goolsbee, Count Ethnic Divisions, Not Bombs, to Tell if a Nation Will Recover From War, New York Times, July 20, 2006; and Alberto Alesina, William Easterly and Janina Matuszeski, Artificial States, National Bureau of Economic Research, Working Paper 12328, June 2006.

For text (subscription): http://www.nytimes.com/2006/07/20/business/worldbusiness/20scene.html

For study text: http://www.nyu.edu/fas/institute/dri/Easterly/File/artificialstatesNBER.pdf

For more on International Issues: http://www.ncpa.org/sub/dpd/?Article_Category=26

FMF Policy Bulletin/ 25 July 2006