Segregation, Ethnic Favoritism, and the Strategic Targeting of Local Public Goods

Abstract

This article demonstrates that ethnic segregation is a key determinant of local public goods provision. We argue that this results from politicians’ strategic engagement in ethnic favoritism: Only when ethnic groups are sufficiently segregated can elites efficiently target coethnics with local public goods. We test this expectation with fine-grained data from Malawi on the spatial distribution of ethnic groups, geolocated distributive goods (water wells), and the ethnic identities of political elites. We find that members of parliament provide more local public goods to their electoral districts when ethnic groups are geographically segregated but that this increased investment is primarily targeted toward coethnics. Thus, while segregation promotes overall public goods provision, it also leads to greater favoritism in the distribution of these goods. Our logic and evidence provide an elite-driven explanation for both the considerable variation in ethnic favoritism across contexts and the underprovision of public goods in ethnically diverse settings.