The Political Boundaries of Ethnic Divisions†

Abstract

Seema Jayachandran was coeditor for this article. We thank Eli Berman, Chris Blattman, Monica Martinez-Bravo, Ruben Enikolopov, Claudio Ferraz, Thiemo Fetzer, Jeremy Magruder, Stelios Michalopoulos, Ted Miguel, Dilip Mookherjee, Ben Olken, Gerard Padro-i-Miguel, Debraj Ray, Enrico Spolaore, Oliver Vanden Eynde, as well as seminar participants at the NBER Political Economy Summer Institute meeting, the NBER Economics of National Security Winter meeting, UC Berkeley, Stanford SITE, Georgetown, Boston University, the BREAD/NBER pre-conference meeting, NEUDC, PacDev, University of Arkansas, ESOC, and ABCDE for helpful comments. Gudgeon is grateful to the Weiss Family Program Fund for financial support. Andrea Adhi and Gedeon Lim provided excellent research assistance. All errors remain ours. A previous version of this paper circulated under the title, “Local Government Proliferation, Diversity, and Conflict.” We use a policy experiment in Indonesia to show how local political boundaries affect ethnic tension. Redrawing district borders along group lines reduces conflict. However, the gains in stability are undone or even reversed when new boundaries increase ethnic polarization. Greater polarization leads to more violence around majoritarian elections but has little effect around l ower-stakes, proportional representation elections. These results point to distinct incentives for violence in winner-take-all settings with contestable public resources. Overall, our findings illustrate the promise and pitfalls of redrawing borders in diverse countries where it is infeasible for each group to have its own administrative unit.