Ethnic or Political Fractionalisation? A District Level Analysis of the Provision of Public Goods in Sri Lanka

Abstract

This study investigates the influence of ethnic and political fractionalisation on the provision of public goods at a district level in Sri Lanka. Evidence shows that political fractionalisation has a greater negative impact on the provision of public goods compared with ethnic fractionalisation. Similarly, political polarisation has a greater negative effect on the provision of public goods compared with ethnic polarisation. The interaction between ethnic and political measures suggests that political fractionalisation (political polarisation) exacerbates the negative effects of ethnic fractionalisation (ethnic polarisation) on the provision of public goods. The ethnolinguistic fractionalisation (ELF) index assumes greater statistical significance under fixed effects estimation suggesting greater within district effects in the relationship between ELF and public good provision.