India is a diverse society and we have to strive for greater inclusiveness so that all individuals, irrespective of their caste, race and religion, feel a part of society. This will bring out the best in the people and help nurture the nation’s development
Why diversity impacts economic progress?
- Heterogeneous and complex societies see the rise of sectional interests that aim to grab public resources to their advantage. Research by economists showed that the provision of public goods tends to be lower in areas with high ethno-linguistic diversity or polarization because it is difficult for people to agree on the provision of public goods that benefit everyone.
- Historical or cultural conflicts may often prevent different sub-groups in a region or country from collectively demanding state services that cater to all rather than to special interests.
- For instance social heterogeneity negatively affects the provision of government services in US cities. Using a measure of heterogeneity, known as ethno-linguistic fractionalization index, they found that districts that are more heterogeneous spend less on education and infrastructure.
- Economists argued that the poor economic performance of most of the African countries is due partly to the large number of different ethnic groups living in the same country and partly to the absurd borders drawn by former colonial powers.
- Ethnically fractionalized societies may suffer from rent-seeking behaviour by different ethnic groups that have difficulties agreeing on public goods such as infrastructure, education, and good government policy. These imply a non-productive use of inputs and may reduce investments in productive sectors and thus inhibit economic growth.
- public goods like education may bring less satisfaction to everyone in a society when the country is highly ethnically fractionalized because of disagreements between ethnic groups on issues like the language of instruction, the learning content, location, etc. This may lead the society to invest less in human capital.
- Schools in particular are treated with suspicion because the minorities believe that the public schools will not educate their children as they do children from the ruling ethnic group.
- Moreover, ethnically fractionalized societies may produce situations of uncoordinated government ministries, each pursuing its own rent-seeking strategy without taking into account the effect of its actions on others. For example, an overvalued official exchange rate and strict exchange rate controls benefit those in power who resell foreign currency on the black market
How diversity does not impacts economic progress?
- Economists have compiled rich data on government expenditure on education and health for districts in Zambia. They find that there is a positive association between ethnic diversity and public expenditure, underscoring the point that even though diversity negatively affects public goods provision at a national level, the effect may not be same at the state or district level.
- The response of the polity and of the state to social division determines collective action or the lack of it.
- Fragmentation may not necessarily lead to worse state performance if political elites are able to forge a common identity that bridges over social fault line. Pointing to the contrasting examples of Kerala and Uttar Pradesh, both of which have very heterogeneous populations, Kerala managed to have better outcomes as its elites united under the banner of sub-nationalism from the 19th century onwards to demand public goods and greater spending on social welfare.
- Diversity spurs economic development and homogeneity slows it down.
- Industrial revolution Europe –
- distinctive cultural norms and values which favour individual effort, freedom and the spirit of enterprise.
- what really propelled Europe and the New World’s economic ascendance was their relative openness to other cultures, which they measure in terms of greater or lesser geographical isolation.
- The lack of cultural diffusion and its manifestation in cultural homogeneity and rigidity diminished the ability of the societies to adapt to a new technological paradigm, thereby delaying the onset of their industrialization and, thus, their take-off to a state of sustained economic growth.
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