Title: Three essays in ethnicity, conflict and the political economy of development
Description: This thesis presents three chapters concerning the political economy of developing nations, including economic, political and conflict factors. The first two chapters focus on the role of ethnic diversity and ethnic geography in countries' development and civil war tendencies, while the third chapter considers the potential impact of foreign aid inflows. In the first chapter, we present a new index of ethnic geography, the Ethnic Diversity and Clustering (EDC) index, which measures the clustering of ethnic groups within a country, as well as the overall ethnic diversity of the country. Using digital map data for over 7000 linguistic groups around the world, we construct the EDC index for 189 countries. We also calculate the traditional Ethno-Linguistic Fractionalization (ELF) index of ethnic diversity for 189 countries, including 186 countries for which we also have the EDC index. In cross-country regressions, our EDC and ELF indices are significantly correlated with measures of civil war, including the number of conflicts, total time spent in war, and total combatant deaths. Evidence from regressions using both indices indicates that civil war is more frequent and severe in countries where citizens of a given ethnic group tend to be more clustered together. Results for the average duration of conflicts are weaker for both indices. In addition, higher levels of ethnic diversity and clustering are associated with an increased incidence of civil conflict for countries with the straighter borders typical of artificial states, but not for other countries. Our results are robust to the inclusion of controls for former colonial status, continent, and climate. Results for the ELF index are robust to a panel regression format, in which we control for GDP per capita.

In the second chapter, we consider the issue of artificial states, which are countries in which the political borders do not coincide with a division of nationalities desired by the people on the ground. We propose and compute for all countries in the world two new measures of the degree to which states are artificial. One index measures how borders split ethnic groups into two separate adjacent countries. The other index measures the straightness of land borders, under the assumption that the straight land borders are more likely to be artificial. We show that these two measures are highly correlated with several measures of political and economic success. In the final chapter, we provide empirical evidence that the correlation between U.S. foreign aid and anti-U.S. terrorism is very small in magnitude. The correlation is significant and positive, and is stronger for military aid than for economic aid. Since military aid can strengthen a recipient country's government, this result lends credence to mechanisms in which support for unpopular governments leads to anti-U.S. sentiments. Our results are robust to several specifications and the use of instrumental variables.