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Do Tolerant Societies Demand Better Institutions?

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Abstract

The increasing ethnic heterogeneity that many societies are experiencing could be interpreted as a detrimental phenomenon, since empirical literature exists that indicates that higher levels of ethnic fractionalization induce higher levels of corruption. This paper aims to show the role of tolerance in overcoming this harmful effect of ethnic heterogeneity. To this end, a sample of 86 countries is tested for a positive association between ethnic fractionalization and corruption. It is then shown that tolerance offsets this effect through both direct and indirect effects on corruption. In order to analyse the indirect effects, the level of income and the freedom of the press are selected as channels, since these represent two determinants of corruption that are linked to tolerance. Moreover, tolerance and corruption have been modelled as composites. Consequently, partial least squares path modelling has been used. For our sample, an index of tolerance towards immigrants and people of different race and an index of corruption are constructed, for which several sources are jointly utilised. Our results appear to indicate that the adverse effect of ethnic fractionalization on corruption is offset by tolerance, which reduces corruption not only directly but also indirectly through the level of income and the freedom of the press.

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Notes

  1. To test the robustness of our results, we have constructed a new index for corruption that includes the International Country Risk Guide Index in the indicator as provided by the Political Risk Services Group. Since in this case the sample was reduced to 80 countries, it was decided to present the results corresponding to a wider sample.

  2. Every bootstrap sample contains the same number of cases as the original sample (n = 86).

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Acknowledgements

The research is partially supported by the Research Group “Research in Applied Economics” (SEJ258, Plan Andaluz de Investigación, Junta de Andalucía, Spain).

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Authors and Affiliations

  1. Dpto. Economía Aplicada III, Universidad de Sevilla, Seville, Spain

    Eva Mª Buitrago

  2. Dpto. Economía e Historia Económica and IUSEN, Universidad de Sevilla, Seville, Spain

    Mª Ángeles Caraballo

  3. Dpto. Administración de Empresas y Marketing and IUSEN, Universidad de Sevilla, Seville, Spain

    José L. Roldán

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  1. Eva Mª Buitrago
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Correspondence to Mª Ángeles Caraballo.

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Appendix

Appendix

See Tables 7 and 8.

Table 7 Descriptive statistics
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Table 8 Corruption and tolerance indices. Data base
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Buitrago, E.M., Caraballo, M.Á. & Roldán, J.L. Do Tolerant Societies Demand Better Institutions?. Soc Indic Res 143, 1161–1184 (2019). https://doi.org/10.1007/s11205-018-2002-4

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