Bernard Mandeville and the doctrine of laissez-faire

The view of Mandeville as a pioneer of laissez-faire is difficultto reconcile with his repeated insistence that private vices were turnedinto public benefits by the ‘dexterous management of the skilfulpolitician’. Even if references to the skilful politician are regarded asshorthand for a legal and institutional framework, there remains thequestion of whether such a framework is a spontaneous order or theproduct of purposeful experiment as Mandeville thought? Mandevillewarned about the harmful effects of meddling but his complaint wasabout the actions of fashionable do-gooders rather than government. Heunderstood that the voluntariness of a transaction could be regarded asa defence against complaints of unfairness but he was quick to pointout the limitations of voluntariness especially in the market for labour.Mandeville’s objective was to teach people what they are not what theyshould be. He pointed to the strengths of the emerging market systembut was not afraid to expose its faults.

State History, Historical Legitimacy and Modern Ethnic Diversity

How much does the antiquity of states, and the sometimes arbitrary nature of colonial boundaries, explain the modern degree of ethnic diversity? It is shown that states with greater historical legitimacy (more continuity between the pre-colonial and post-colonial state) have less ethnic diversity. Historical legitimacy is more strongly correlated with ethnic diversity than are the antiquity of states, genetic diversity or the duration of human settlement. Although historical legitimacy is particularly pertinent to Africa, the correlation also holds outside Africa.

Size Matters: The Effect of the Size of Ethnic Groups on Development

The share of ethnic groups is one of the most important features of African politics. It affects civil wars, representation in government positions, distributive and allocative policies. In this paper we use the partition of ethnic groups as a natural experiment in order to estimate the effect of the share of these ethnic groups on development. We show that larger groups have an advantage in terms of development and that the partition in itself does not matter for development. This result is explained by the fact that the partition matters only when the resulting groups are relatively small, since their lack of political representation may weaken support for institutions, may bias policies and the provision of ethnic/regional public goods.