NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Stefania Lovo

The Grantham Research Institute on
Climate Change and the Environment
London School of Economics and Political Science
Houghton Street
London WC2A 2AE

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NBER Working Papers and Publications

September 2014Public Goods and Ethnic Diversity: Evidence from Deforestation in Indonesia
with Alberto Alesina, Caterina Gennaioli: w20504
This paper shows that the level of deforestation in Indonesia is positively related to the degree of ethnic fractionalization at the district level. To identify a casual relation we exploit the exogenous timing of variations in the level of ethnic heterogeneity due to the creation of new jurisdictions. We provide evidence consistent with a lower control of politicians, through electoral punishment, in more ethnically fragmented districts. Our results bring a new perspective on the political economy of deforestation. They are consistent with the literature on (under) provision of public goods and social capital in ethnically diverse societies and suggest that when the underlying communities are ethnically fractionalized decentralisation can reduce deforestation by delegating powers to more ...
 
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