The economic impact of the interaction of ethnicity and inclusive and exclusive nationalism in the post-colonial state

Political theorists often view ethnic diversity as problematic for the modern state (Horowitz 1984, Connor 1994). Recent studies show an inverse relationship between ethnic diversity and economic growth in a state: the more diverse a state is ethnically, the slower the growth rate (Alsina et al. 2001). Alsina et al. suggest that multiple ethnic groups make it harder for the state to implement good economic policy. The basic argument explored in this study is that there are different understandings not of ethnicity per se, but of nationalism and how it interacts with ethnic groups. It is these understandings that lead to problems on the state level. Furthermore, I hope to show that although ethnicity as a broad variable affects growth negatively, it acts in a variety of ways in different regions of the world. Not all nationalism is the same, and therefore not all interactions with ethnic groups are the same, and therefore, the effect on state policy and economic growth is not the same in all states. Two regions are examined, Sub-Saharan Africa and the Caribbean. Pooled cross-time economic and demographic data from 1970--2000 was used. Analysis of the data reveled that the variable of ethnic diversity does have a different impact in sub-Saharan Africa than it does in the Caribbean. Case studies done on Nigeria and Trinidad and Tobago further support the concept that ethnic identity as a concept if fundamentally different between the two regions. Nationalism in sub-Saharan Africa tends to be exclusive to a single ethnic group. Nationalism in the Caribbean is more inclusive and able to absorb a broader range of ethnic groups.