BREAD Working Paper No. 531, December 2017

The Political Boundaries of Ethnic Divisions

Samuel Bazzi, Matthew Gudgeon

Abstract

Policymakers in diverse countries face the persistent challenge of managing ethnic divisions. We argue that redrawing subnational political boundaries can fundamentally reshape these divisions. We use a natural policy experiment in Indonesia to show that changes in the political relevance of ethnic divisions have significant effects on conflict in the short- to medium-run. While redistricting along group lines can increase social stability, these gains are undone and even reversed in newly polarized units. Electoral democracy further amplifies these effects given the large returns to initial control of newly created local governments in settings with ethnic favoritism. Overall, our findings show that the ethnic divisions underlying widely-used diversity measures are neither fixed nor exogenous and instead depend on the political boundaries within which groups are organized. These results illustrate the promise and pitfalls of redistricting policy in diverse countries where it is not feasible for each group to have its own administrative unit.

Keywords: Conflict, Decentralization, Ethnic Divisions, Polarization, Political Boundaries

JEL classification codes: D72, D74, H41, H77, O13, Q34

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