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.