Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/235079 
Year of Publication: 
2019
Series/Report no.: 
KOF Working Papers No. 465
Publisher: 
ETH Zurich, KOF Swiss Economic Institute, Zurich
Abstract: 
We examine the effect of economic globalisation on income redistribution and hypothesise that it depends on ethnic fractionalisation. In highly fractionalised countries, powerful ethnicities are able to extract globalisation-induced benefits, whereas their governments face substantial political obstacles when redistributing income between ethnic groups. Using the newly constructed KOF Globalisation Index, we find supportive evidence for the interactive effect of ethnic fractionalisation and de jure financial globalisation on redistribution. In particular, the total effect of de jure financial globalisation on redistribution is negative in highly fractionalised countries. Governments in these countries are apparently not only reluctant to offset potential consequences stemming from de jure financial globalisation, but they even reduce redistribution to lower levels.
Subjects: 
Income redistribution
Globalisation
Ethnic fractionalisation
JEL: 
D31
D63
F15
O11
O15
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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