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Research linking ethnic cleavages to economic underdevelopment is a hallmark of recent efforts to explain economic growth. Similarly, the rule of law as a credible commitment to property rights and contract enforcement is also identified with economic development. Rather than treating these factors as rival explanations for economic development around the world, I propose the rule of law as the causal mechanism through which ethnic fractionalization (EF) influences growth in many countries. I argue ethnic diversity negatively impacts the rule of law due to the prevalence of ethnically-based patronage networks in developing countries. Public officials, I argue, face greater incentives to undermine the rule of law in societies with pervasive ethnic cleavages than in those without. I employ pooled cross-sectional, time-series data for 55 developing countries between 1996 and 2010 to test my theoretical argument. Ultimately, my research demonstrates ethnic fractionalization's deleterious effect on the rule of law and provides a uniform framework linking demographic inputs to economic outcomes.

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This document was originally published by the Addleton Academic Publishers in Economics, Management and Financial Markets. Copyright restrictions may apply.