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Quartz: When diverse groups interact, everybody ends up smarter and healthier

“…although individuals may feel antagonism towards other groups in society, that prejudice is less strong if they interact with these groups in their daily lives.” — Desmet, Gomes and Ortuño-Ortín

Quartz internet news magazine covered the research of SMU Economics Professor Klaus Desmet and colleagues. The article reported that the new study by Desmet and two other economists found that after examining data from nearly every country in the world, they find that when diverse groups interact, it leads to better outcomes in terms of health, education and public infrastructure.

“Chalk one up for contact theory,” wrote San Francisco-based reporter Dan Kopf, who covers economics and markets and has a Masters in Economics from the London School of Economics.

Desmet, who has his degree from Stanford University, is Ruth and Kenneth Altshuler Centennial Interdisciplinary Professor. His research interests include international trade, regional and urban economics, macroeconomics and political economy.

Desmet’s work is likely to be of profound significance for actual policy makers, according to Santanu Roy, University Distinguished Professor and Chair of the SMU Department of Economics.

“Klaus Desmet is engaged in truly path breaking research in undestanding the spatial, cultural and genetic dimensions of the global economy and the deep long run determinants of economic change,” said Roy. “Over the last few years, his work has been published in the very top journals in economics such as the American Economic Review and the Journal of Political Economy, a major boost to the reputation and visibility of the SMU economics department.”

The Quartz article, “When diverse groups interact, everybody ends up smarter and healthier,” published March 24, 2017.

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EXCERPT:

By Dan Kopf
Quartz

A striking fact about the tide of nationalism sweeping through the West is that it is strongest in places with the least diversity. Supporters of Donald Trump, and his “America first” policies, generally come from areas of the US least touched by immigration. The parts of the UK that opted to “take back control” by voting for Brexit also clustered in areas with fewer foreign-born residents.

But as a group of economists note, “although individuals may feel antagonism towards other groups in society, that prejudice is less strong if they interact with these groups in their daily lives.”

In recently released research (pdf), Klaus Desmet, Joseph Gomes, and Ignacio Ortuño-Ortín go well beyond examining the demographics of Trump and Brexit voters. Their research explores whether contact theory, the belief that increased interaction leads to better relations between groups, or conflict theory, that interaction leads to more prejudice, is a better way to describe the current state of the world. They examined data from nearly every country in the world, and find that when diverse groups interact, it leads to better outcomes in terms of health, education, and public infrastructure. Chalk one up for contact theory.

A vast body of earlier research has found, however, that ethnic and linguistic diversity tends to reduce spending on public goods. This is usually explained as a preference not to share with people perceived to be different. For example, Sweden’s high government spending versus the US might be down to Sweden’s relative lack of diversity.

This suggests that diversity is not helpful if groups mainly keep to themselves. To test this assumption, Desmet, Gomes, and Ortuño-Ortín divided the world into a grid of five-square-kilometer cells and estimated the number of people who speak different languages in each. Using this data and country-level estimates of diversity, the researchers calculated two numbers:

1) Country diversity: The probability that within a country two randomly chosen people speak the same language. A higher score means greater diversity in languages spoken.

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Culture, Society & Family Economics & Statistics Researcher news SMU In The News

The Economist: Goldilocks nationalism

The size and homogeneity of a country’s population has a big bearing on its economic policies

Economist, SMU, Economics, Klaus Desmet

The Economist’s “Free Exchange” column covered the research of SMU economist Klaus Desmet as part of a larger examination of the ideal size of nations from an economic perspective and within the context of Scotland’s recent vote on the question of independence.

The article, “Goldilocks nationalism,” published Sept. 27.

Desmet is an expert in international trade, regional and urban economics, macroeconomics and political economy. He is the Ruth and Kenneth Altshuler Centennial Interdisciplinary Professor in Economics.

Desmet’s research published in the Journal of Development Economics, “The political economy of linguistic cleavages,” and looked at the genealogical relationships between the world’s 6,912 languages.

The data revealed which linguistic cleavages are most relevant for a range of political economy outcomes.

Desmet and his co-authors on the study found “that deep cleavages, originating thousands of years ago, lead to better predictors of civil conflict and redistribution. The opposite pattern emerges when it comes to the impact of linguistic diversity on growth and public goods provision, where finer distinctions between languages matter.”

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EXCERPT:

The Economist
WHEN Scotland turned down independence, it was bucking a trend. Since 1946 the number of sovereign states has soared, from 76 to 197. The steady shrinking of the world’s political units raises the question of what the ideal size would be from an economic perspective. Separatists from Catalonia to the southern Philippines should be aware that a country’s population, economists believe, has a big impact on all sorts of policies, from the level of government spending to its openness to trade.

Separatists eyeing the exit have many motivations, but economics typically plays a big role in the choice to stay or go. In their book “The Size of Nations”, Alberto Alesina and Enrico Spolaore lay out the costs and benefits of going it alone.* Scale has its advantages: bigger countries are easier to defend from foreign aggressors, for instance. When barriers to trade are high, a bigger domestic market allows for more internal specialisation. A 19th-century British prime minister is reported to have complained to a French ambassador, “If you were not such persistent protectionists, you would not find us so keen to annex territories!” America’s size allowed it to develop new and highly productive forms of industry in the late 1800s, which Europe’s smaller countries could not match until tariffs fell in the 20th century.

Yet the bigger a country grows the more multitudes it contains. Larger populations are not always more diverse than smaller ones—Japan is both much larger and more homogenous than Belgium—but in larger countries there are generally more politically distinct subgroups. As the voting public becomes more heterogenous, the scope for intractable disputes over government policies grows.

Messrs Alesina and Spolaore reckon falling barriers to trade have reduced the cost of being a small state and boosted interest in separatism. Ironically, the European Union has made breaking up especially attractive. Catalan nationalists, for instance, assume that if Catalonia parted ways with Spain, which it currently subsidises by paying more in taxes than it receives in government spending, it would nonetheless remain within the single market. That makes independence a much easier sell.

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