This paper examines the impact of ethnic divisions on conflict. The empirical specification is informed by a theoretical model of conflict (Esteban and Ray, 2011) in which equilibrium conflict intensity is related to just three distributional indices of diversity: ethnic polarization, ethnic fractionalization, and a Greenberg-Gini index of "difference" constructed across ethnic groups. Our empirical findings verify that these distributional measures are significant correlates of conflict. The underlying theory permits us to use these results to make inferences about the relative importance of public goods in conflict, as well as the extent of within-group cohesion in conflictual activity. These effects are further strengthened as we introduce country-specific measures of group cohesion and the relative importance of public goods, and combine them with the distributional measures exactly as specified by the theory.
Published as: Ethnicity and Conflict: an Empirical Study in American Economic Review , Vol. 102, No. 4, 1310--1342, January, 2012