Jan 31, 2012

Languages and growth

I have mixed feelings about the implications of this:
. . . [E]conomic growth requires that groups have the ability to coordinate, interact and organize in networks of production, knowledge and trade. This ability is affected by linguistic divisions. In India, for instance, the degree of integration between regions is likely hindered by linguistic barriers — even linguistic barriers separate relatively similar linguistic groups such as Hindi and Gujarati speakers. Coordination, integration and more generally the ability to form knowledge, production and trading networks is hampered as soon as linguistic differentiation prevents interactions between groups, and this can occur between groups that are relatively similar linguistically.
The case of public goods shares characteristics of both types of outcomes: public goods are inherently redistributive in nature, and their provision depends on differences in preferences among participants. At the same time, the provision of public goods requires coordination and interactions, that even superficial cleavages might hamper. We found that, much as in the case of growth, for a wide array of measures of public goods, fine distinctions between linguistic groups matter to hinder their provision. Even when cleavages are shallow, a country may fail to have well-functioning public services, not necessarily because people are unwilling to redistribute, but because of coordination failures. 
That is from the paper "The political economy of linguistic cleavages," by Desmet, Ortuño-Ortín, and Wacziarg.

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