American Political Science Review (2018)112.4,1096-1103 doi:10.1017/S0003055418000308 American Political Science Association 2018 Letter Ethnoracial Homogeneity and Public Outcomes:The (Non)effects of Diversity ALEXANDER KUSTOV Princeton University GIULIANA PARDELLI Princeton University ow does ethnoracial demography relate to public goods provision?Many studies find support for the hypothesis that diversity is related to inefficient outcomes by comparing diverse and ho- mogeneous communities.We distinguish between homogeneity of dominant and disadvantaged groups and argue that it is often impossible to identify the effects of diversity due to its collinearity with the share of disadvantaged groups.To disentangle the effects of these variables,we study new data from Brazilian municipalities.While it is possible to interpret the prima facie negative correlation between diversity and public goods as supportive of the prominent"deficit"hypothesis,a closer analysis reveals that,in fact,more homogeneous Afro-descendant communities have lower provision.While we cannot rule out that diversity is consequential in other contexts,our results cast doubt on the reliability ofprevious findings related to the benefits of local ethnoracial homogeneity for public outcomes. INTRODUCTION ticular group shares.We thus argue that,to properly identify the relationship of ethnic diversity and public ow does public goods provision'relate to eth- outcomes,one needs to compare diverse communities 4号元 noracial demography?Political scientists and to homogeneous communities of all groups rather than economists seemed to have reached a consen of a single(usually dominant)group in society,which sus regarding the existence of a robust association be- is nonetheless impossible in many previously studied & tween diversity and a variety of negative social out- contexts.To overcome this limitation,we focus on the comes (i.e.,"diversity deficit").Despite the scarcity of empirically relevant-yet largely overlooked-case of support for a causal link,the sheer number of studies Brazil,which allows us to distinguish between homo- showing diversity to harm provision sufficed to con- geneous local populations composed of either domi- vince the most skeptical of readers.More recently,how- nant or disadvantaged groups.2 When the appropriate ever,these earlier findings have been challenged both group share measures are taken into account,results empirically and theoretically. show that diversity has no discernible effect on public This paper contributes to this ongoing debate by demonstrating that the previously uncovered effects of goods provision. In what follows,we first discuss the limitations of diversity can often be confounded with those of par- previous tests of the diversity hypothesis and empha- size the distinction between the use of group share and Alexander Kustov is a PhD Candidate,Department of Poli- diversity measures (e.g.,fractionalization).To tackle tics.Princeton University.001 Fisher Hall.Princeton.NJ 08544 these issues.we make the case for the analysis of munic- (akustov@princeton.edu). ipal outcomes in the racially diverse and highly decen- Giuliana Pardelli is a PhD Candidate,Department of Poli- tralized case of Brazil.We then show that,when we use tics,Princeton University,001 Fisher Hall,Princeton,NJ 08544 the model specifications adopted in previous studies, (pardelli@princeton.edu). The authors'names appear in alphabetical order.An earlier ver. diversity seems to be negatively correlated with pub- sion of the paper was presented at the 2016 annual meeting of the lic goods,even after controlling for a variety of con- American Political Science Association.We would like to thank founding factors.While this result can be seen as sup- our colleagues,editors,and anonymous reviewers who have read porting the standing hypothesis,a closer examination and commented on previous drafts of this article.We are espe- of the evidence reveals that diversity is not detrimental cially grateful to Samuel Diaz,Mark Kayser,and Ronald Ingle- hart for their helpful suggestions,and Joana Naritomi for kindly per se,but only insofar as it reflects an increase in the sharing her data with us For their useful comments on the pre- share of the disadvantaged group in the local popula- vious versions of our larger project on ethnic cleavages and pub tion.Thus,after re-examining the data and including lic goods provision,we would also like to thank Rafaela Dancy group share measures,we find that,in fact,more homo- gier,Kosuke Imai,Tali Mendelberg,Grigore Pop-Eleches,Edward Telles,Andreas Wimmer,and Deborah Yashar.All errors and omis- geneous Afro-descendant municipalities have worse sions are the sole responsibility of the authors.Replication files are available at the American Political Science Review Dataverse: https://doi.org/10.7910/DVN/AY32JZ. 2 We use the term "disadvantaged"merely to emphasize that eth- Received:August 7 2017;revised:February 19,2018;accepted:May nic groups that are relatively deprived along a given dimension 18,2018.First published online:June 19,2018 (Horowitz 1985)-and conventionally referred to as "minorities"- may constitute demographic majorties.Since social,economic,and I We follow the literature and use "public goods provision"as a gen- political disparities between groups tend to be strongly correlated eral term for government-provided public services such as education and hardly dissociable in many contexts(Stewart 2005).including health care,and infrastructure,even when they do not fit the strict that of Brazil (Bailey 2009),we are agnostic about which particular economic description (i.e.,nonexcludable and nonrivalrous goods) dimension of disadvantage is more consequential. 1096American Political Science Review (2018) 112, 4, 1096–1103 doi:10.1017/S0003055418000308 © American Political Science Association 2018 Letter Ethnoracial Homogeneity and Public Outcomes: The (Non)effects of Diversity ALEXANDER KUSTOV Princeton University GIULIANA PARDELLI Princeton University How does ethnoracial demography relate to public goods provision? Many studies find support for the hypothesis that diversity is related to inefficient outcomes by comparing diverse and ho￾mogeneous communities. We distinguish between homogeneity of dominant and disadvantaged groups and argue that it is often impossible to identify the effects of diversity due to its collinearity with the share of disadvantaged groups. To disentangle the effects of these variables, we study new data from Brazilian municipalities. While it is possible to interpret the prima facie negative correlation between diversity and public goods as supportive of the prominent “deficit” hypothesis, a closer analysis reveals that, in fact, more homogeneous Afro-descendant communities have lower provision. While we cannot rule out that diversity is consequential in other contexts, our results cast doubt on the reliability of previous findings related to the benefits of local ethnoracial homogeneity for public outcomes. INTRODUCTION How does public goods provision1 relate to eth￾noracial demography? Political scientists and economists seemed to have reached a consen￾sus regarding the existence of a robust association be￾tween diversity and a variety of negative social out￾comes (i.e., “diversity deficit”). Despite the scarcity of support for a causal link, the sheer number of studies showing diversity to harm provision sufficed to con￾vince the most skeptical of readers.More recently, how￾ever, these earlier findings have been challenged both empirically and theoretically. This paper contributes to this ongoing debate by demonstrating that the previously uncovered effects of diversity can often be confounded with those of par￾Alexander Kustov is a PhD Candidate, Department of Poli￾tics, Princeton University, 001 Fisher Hall, Princeton, NJ 08544 (akustov@princeton.edu). Giuliana Pardelli is a PhD Candidate, Department of Poli￾tics, Princeton University, 001 Fisher Hall, Princeton, NJ 08544 (pardelli@princeton.edu). The authors’ names appear in alphabetical order. An earlier ver￾sion of the paper was presented at the 2016 annual meeting of the American Political Science Association. We would like to thank our colleagues, editors, and anonymous reviewers who have read and commented on previous drafts of this article. We are espe￾cially grateful to Samuel Diaz, Mark Kayser, and Ronald Ingle￾hart for their helpful suggestions, and Joana Naritomi for kindly sharing her data with us. For their useful comments on the pre￾vious versions of our larger project on ethnic cleavages and pub￾lic goods provision, we would also like to thank Rafaela Dancy￾gier, Kosuke Imai, Tali Mendelberg, Grigore Pop-Eleches, Edward Telles, Andreas Wimmer, and Deborah Yashar. All errors and omis￾sions are the sole responsibility of the authors. Replication files are available at the American Political Science Review Dataverse: https://doi.org/10.7910/DVN/AY32JZ. Received: August 7, 2017; revised: February 19, 2018; accepted: May 18, 2018. First published online: June 19, 2018. 1 We follow the literature and use “public goods provision” as a gen￾eral term for government-provided public services such as education, health care, and infrastructure, even when they do not fit the strict economic description (i.e., nonexcludable and nonrivalrous goods). ticular group shares. We thus argue that, to properly identify the relationship of ethnic diversity and public outcomes, one needs to compare diverse communities to homogeneous communities of all groups rather than of a single (usually dominant) group in society, which is nonetheless impossible in many previously studied contexts. To overcome this limitation, we focus on the empirically relevant—yet largely overlooked—case of Brazil, which allows us to distinguish between homo￾geneous local populations composed of either domi￾nant or disadvantaged groups.2 When the appropriate group share measures are taken into account, results show that diversity has no discernible effect on public goods provision. In what follows, we first discuss the limitations of previous tests of the diversity hypothesis and empha￾size the distinction between the use of group share and diversity measures (e.g., fractionalization). To tackle these issues,we make the case for the analysis of munic￾ipal outcomes in the racially diverse and highly decen￾tralized case of Brazil.We then show that, when we use the model specifications adopted in previous studies, diversity seems to be negatively correlated with pub￾lic goods, even after controlling for a variety of con￾founding factors. While this result can be seen as sup￾porting the standing hypothesis, a closer examination of the evidence reveals that diversity is not detrimental per se, but only insofar as it reflects an increase in the share of the disadvantaged group in the local popula￾tion. Thus, after re-examining the data and including group share measures, we find that, in fact, more homo￾geneous Afro-descendant municipalities have worse 2 We use the term “disadvantaged” merely to emphasize that eth￾nic groups that are relatively deprived along a given dimension (Horowitz 1985)—and conventionally referred to as “minorities”— may constitute demographic majorities. Since social, economic, and political disparities between groups tend to be strongly correlated and hardly dissociable in many contexts (Stewart 2005), including that of Brazil (Bailey 2009), we are agnostic about which particular dimension of disadvantage is more consequential. 1096 Downloaded from https://www.cambridge.org/core. 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