Language Policy and Economic Development: Delving Into the Black Box of Fundamental Institutions
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1 Language Policy and Economic Development: Delving Into the Black Box of Fundamental Institutions David Laitin (Stanford University) Rajesh Ramachandran (Goethe University) Noah Rosenberg (Stanford University) SSDEV 2013 July 16th, 2013
2 Motivation and question One of the defining feature dividing developed from developing states -choice of official language. Developed states - official language belongs to (majority) indigenous group/s in the country. Developing states official language belongs to no indigenous group in the country and distant. Literature highlights importance of institutions for growth: However those identified are equilibrium outcomes (rule of law, quality of govt., protection against expropriation) rather than fundamental causes. In this paper try explore if language institutions are a fundamental source for growth and development.
3 Current approach Construct a measure that captures distance from and exposure to the official language. Show that our empirical measure is robustly correlated with variety of indicators of development. Theoretical channel - Argue that language choices impose varying costs of participation depending on language repertoire of linguistic groups and hence: Determines who has access to power, wealth and prestige in society. Provide numerous historical examples supporting the above claim. In a cross-country regression framework, estimate impact of distance and exposure to language policy on GDP per capita.
4 Construction of measure
5 Measure of distance and exposure Language choices determines cost of participation. Cost of participation for group i dependent on: Distance of group i from official language o. Distance of other groups (i = j) from official language (the exposure effect) Operationalize the measure using language family trees from Ethnologue.
6 Distance measure and example Distance between any two languages i and j defined as: d ij = # of common nodes between i and j 1 ( 1 )λ 2 (# of nodes for language i+# of nodes for language j) λ is a parameter that determines how fast the distance declines as the number of shared branches increases. Example Bawaen and Indonesian Both belong to the Austronesian Language Family. Share 3 common nodes. Bawean 5 nodes; Indonesian 7 nodes d ij = 1 ( 3 6 )λ Example Spanish and Indonesian Different language families - d ij = 0. tree
7 Country level measure Consider all language groups comprising at least 1% of population (data from Fearon (2003)) Calculate distance from official language (d io ) for each linguistic group i in the country. Official language is the language in which the first organic laws or constitution has been written. Alternatively language of secondary education and higher courts. The average distance from the official language for any country i is calculated as: D i = j=1 n P ij d jo
8 Reduced from evidence Log GDP per capita 2000 US constant $ JPN NORCHEUSA DNK IRL SWE SGP ITA ISR AUS BEL DEU CAN NLD AUT GBR FINFRA KWT CYP ESP NZL KOR PRT SVN GRC BHR SAU URY ARG OMN CZE LBY TTO HRV POL VENCHL SVK MEX MUS BRA CRI LBN HUN JAM PAN TUR EST MYS LTU LVA DOM TUN COL CUB SLV JOR RUS EGY BIH BGR ROU DZA MKD THA IRN GTM PER ALB BLR CHNNIC HND SYR MAR ECU KAZ IRQ GUY IDN UKR YEM ARMAZETKM GEO BTN HTI MNG MRT UZB LAO BGD VNM MDA KHM KGZ NPL TJK BOL PAK ARE ZAF FJI LKA IND CMR SDN NAM GAB BWA PRY SW PHL COG DJI CIV ZWE GM SEN NGA TZA ZMB BEN LSO GIN KEN AGO MDG RW MLI MO CAF GHA TGO UGA LBR BFA SLE GNB NER MW ERI TCD BDI ETH COD average distance from official language Figure: Log GDP per capita in 2000 US constant dollars and average distance from official language
9 Reduced form evidence on channel Proportion speaking official language PRT NOR URY JPN DNK ISR CUB CAN NLD FRA SLV GUY PRK ITA DOM BRA KOR POL GRC ARM GBR CHL HRV AUS CYP SVN ARG DEURUS CRIFIN MNG NZL IDN COL ALB BEL VEN CZE CHE NIC AUT ROUTUR TTO MEX SWE VNM HND SVK ECU PER MUS LTU TKM SGP JAM PAN LVAGEO BGR BGD AZE USADZA MKD BHR CHNBLR UKR MDA ESP THA GTM TJKEST IRN LAO HTI MRT MMR NPL KGZ MYS AFG BTN KAZ BOL LKA FJI IND CMRZAF NAM GAB PRY CIV AGO TGO MO ZWE ETH COG LSO CAF DJI LBR ZMB NGA GIN TCD SLE KEN MDG RW TZA GNB GHA BEN SEN NER COD MLI UGA BFA SW MW BDI GM average distance from official language Figure: Proprtion speaking official language and average distance from official language Sources: Ethnologue, Leclerc (2011), Albaugh (2012), La Francaphonie(2007), Crystal(2003) In fact in more than 25 African countries less than 20% speak the official language - Average less than 10%.
10 Link between indicators of interest and average distance from official language
11 Reduced form evidence on effect on educational indicators Avg. years of Schooling NOR CZE NZL AUS DEU CAN ISR EST KOR JPN IRL SVN SWE RUS HUN SVK UKR NLD ARM LTU TWN DNK ALB BEL GRC CUB CHE FIN ESP FRA ROULVA KAZ POL CYP BGR JAM AUT CHL TJK ITA ARGPAN HRV GBR TTO BHR MYS KGZ BOL SGP JOR URY CRI MEX GUY PER MNG PRT SAU IRN CHN BRA MUS COL LBY SLV ECU DOM DZA EGY TUNHNDTUR THA VEN KWT NIC VNM IRQ IDN BGD HTI SYR LAO MAR KHM MMR MRT NPL YEM USA Panel A AFG GTM PAK LKA IND SDN FJI ARE ZAF CMR NAM average distance from official language BWA PHL PRY GAB ZWE SWZ GHA ZMB COG KEN LSO TZA TGO UGA CIV SEN MWI LBR CAF BEN RWA SLE COD GMB BDI MLI NER MOZ % of pop. with no schooling Panel B NER MLI MOZ GMB YEM AFG SLE BEN BDI SDN LBR RWA CAF NPL MAR PAK COD CIV MRT TGO BGD IND EGY LAO HTI NIC IRQ GTM KHM SEN GHA MWI TUN DZA JOR TZA KEN COG LBY UGA MMR IDN NAM GAB SAU IRNECU CMR ZMB SLV BWA LSO BRA VENSYR ZAF SWZ CYP PRT HND DOM CHE TUR THA MYS BOL ARE MUS CHN SGP ITA JAM COL BHR MEX PER LKA ZWE PAN VNM KWT ISR HRV KOR IRL BEL URY POL ARG CUB CRI DEU GUY NLD CHL PHL NOR AUS DNK JPN SVN ALB GRC SWE UKR GBR CZE CAN ARM AUT FIN RUS USA ESP MNG LTU FRA HUN BGR ROU TWN SVK FJI PRY TTOTJK NZLVA KGZ EST KAZ average distance from official language Figure: Educational indicators and average distance from official language
12 Distance from official language and effects on education Most poignant example Sub-Saharan Africa: No country, except Ethiopia and Tanzania, provides the entire span of primary schooling in a local language. At the same time the lowest levels of educational attainment in the world, despite huge increase in resources allocated (Devarajan and Fengler 2013) Studies from developed world (finding little effects of mother tongue provision) might be inapplicable to the developing world: Exposure effect very different. Supply side constraints - eg. Teacher language skills Namibia - 98% teachers had inadequate English skills. Tanzania - 89% teachers had inadequate English skills.
13 Language and health Disease prevention activities and accessing medical care often involve the use of various forms of interpersonal communication and mass media. Report of institute of medicine of United States (2003) analyzing racial and ethnic disparities in health finds: Language barriers and limited English proficiency were a major system-level determinant of poor health outcomes. Led to the first Ferderal policy (2000) of language in health care. Martinez (2007) finds language an important cause for negative health outcomes for Lationos. Similar findings by Health Canada (2001) Striking lack of basic preventive care in developing countries (Madajewicz et al. 2007, Jalan Somanathan 2008, Dupas 2011, Cohen et al. 2011). Role of lack of information has been highlighted - specific role of language barriers remains unstudied.
14 Average distance from official language and health Malnutrition prevalence BGD Panel A IND SOM NPL LAO AFG PAKSDN KHM MMR VNM PRK HTI MRT IDN LKA TJK CMR MYS EGY AZE HND SYR GUY BTN URY ALB KOR BRA CHN DOM BIH JAM TUN COL ARG VEN ARM NIC LBY LBN SLV PAN MNG DZA SAU MAR THA OMN IRQ UZB CUB JOR TUR CRI GRC DEU BLR CHL USA ESP BGRMKD MDA GEO MEX KGZ IRN ECU GTM ZAF PER KAZBOL KWT NAM average distance from official language NER MDG BFA TCD BDI ETH DJI SLE NGA CAF MLI CIV LBR MOZ PHL GIN TGO BEN TZA SEN AGO GMB GHA GNB KEN RWA ZMB LSO MWI UGA ZWE BWA COG SWZ PRY Life Expectancy at birth Panel B JPN SGP ISR DNK KOR NOR AUS ITA CYP IRL PRT SVN CUB BEL CRI GRC SWE DEU CAN CHE NLD AUT GBR ESP FIN FRANZL CHL BIH HRV URY MUS BRA EGY CHN TUN POL ARG ALB CZE USA DOM JAM COL VEN JOR ARM NIC LBY PAN VNM SYR LBN HND LTU HUN BGR BGD PRK UKR BLR SLV DZA SAU SVK TUR MKD THA OMN AZE MAR LVA GEO BHR MEX EST MYS KWT ECU ARE IRN PER LKA PRY RUS LAO MNG UZB MDA IRQ NPL IDN TTO GTM KGZ GUY FJI TJK TKM BTN KAZ PHL BOL MMR PAK IND MDG HTIKHM SDN NAM GAB GHA ERI MRT DJI GMB SEN ETH LBR TZA SOM CMR ZAF BWA CIV BFA GIN NER RWA BEN KEN TGO COG UGA NGA AGO AFG BDI TCD MOZ MLI MWI SLE ZWE GNB LSO ZMB SWZ CAF average distance from official language Health Exp. as % of GDP Panel C USA SLE DNK PRT DEU BEL GRC CAN NLD CHE FRA LBR AUT MDA JPN ITA BIH HRV ISR URY AUS NOR IRL BRA SVN ARG CUB JOR CRI SWE NIC GBR FIN ESPNZL GEO CYP HTI KOR POL CZE CHN EGY DOM MUS TUN COL UKR CHL LBN PAN HND HUN ZAF UGA RWA LSO BDI ALB VEN BLR YEM KHM RUS AZE VNM LTU SLV BGR SVK MKD AFG ECU MNG LAO SGP JAM ARM MRT UZB TUR LVA NPL MAR IRQ TTO MEX KGZ GTM NAM DJI PRY MWI TJK EST IRN GUY BGD SYR DZA SAUTHA BHRMYS BTNPER BOL SDN KAZ LKA IND CMR BWA MLI BFA SWZ MOZ TGO NGA ZMB TZA GNB NER GHA CIV GIN SEN FJI LBYTKM MMR OMN IDN KWT PAK ARE GAB MDG PHL CAF TCD KEN BEN AGO GMB ETH ERI COG average distance from official language Per capita health Exp. in 2005 PPP dollars USA Panel D NOR CHE NLD DNK IRL BEL DEU CAN AUT AUS SWEFRA ITAGBR JPN GRC FIN SGP PRT ESPNZL CYP ISR SVN KOR CZE HRV HUN SVK BIH BRA URY POL ARG CRI CHL MUS BGD EGY HTI CHN DOM LAO JAM TUN COL CUB ALB VEN JOR UKR BLR LBN PAN RUS LTU BGR SAU TUR LVA TTO YEM ARM NIC LBY AZE KHM VNM HND SYR SLV MKD OMN TKM MNG DZA MRT UZB NPL MMR MAR MDA THA IRQ GEO BHR MEX EST KWT ARE IRN MYS ECU ZAF IDN TJK KGZ GUY AFG BTN GTM PER KAZBOL PAKSDN LKA INDCMR FJI NAM BWA GAB SLE DJI LBR TZA GNB NGA MWI TGO GMB MOZ BEN ZMB SWZ KEN ETH PHL ERI COG PRY GIN MDG RWA SEN MLI GHA NER UGA CAF TCD AGO BDI BFA LSO CIV average distance from official language Figure: Health indicators and expenditure and average distance from official language
15 Historical examples of role of language policy Tool for elite manipulation leading to conflict - Sri Lanka (1956 decree) Tool to preserve privileges - Austro-Hungarian Empire (1899 decree) Tool to impose new barriers to mobility - United Pakistan (1947 law) How gains might not materialize due to changes in only education - Algeria (1967 law)
16 Language policy and final effects on majority TZA Proportion of people living under $ HTI BGD LAO CHN KHM VNM HND MRT NPL IDN COL GEO VEN NIC SLV BRA PAN DOM ARG ARM MDA CRI AZE MAR EGY BIH URY TUN HRV JAM POL SVN ALB JOR CHL UKR BLRRUS LTU SYR TUR HUN BGRSVKMKD THA LVA TJK KGZ BTN MEX EST MYS ECU GTM PER KAZ PAK BOL LKA CMR ZAF FJI NAM average distance from official language SLE MDG MW MO RW SW MLI TCD NGA ZMB CAF UGA ETH GIN BFA AGO GNB BEN SEN LSO GM PHL CIV DJI PRY Figure: Proportion of population living below $1.25 a day and average distance from official language
17 Empirical methodology
18 The method We run the reduced form regression given by: Log GDP per Capita i = α Average Dist. From Official Language i + B i X i + ɛ i X i refers to a vector of controls. Robust standard errors Clustering at country level does not change results
19 Table: Effect of average distance on GDP per capita Dependent variable - Log GDP per capita in 2000 US constant dollars (1) (2) (3) (4) (5) (6) (7) (8) (9) Average Distance from Official Language *** *** *** *** *** *** *** *** *** (0.227) (0.390) (0.428) (0.361) (0.409) (0.456) (0.425) (0.480) (0.479) Ethno-Linguistic Fractionalization ** 1.168*** 1.209*** 1.117** 0.914* * (0.523) (0.544) (0.409) (0.429) (0.510) (0.492) (0.547) (0.543) Avg. Protection against 0.540*** 0.516*** 0.532*** 0.499*** 0.470*** 0.372*** 0.359*** Expropriation risk (0.0519) (0.0640) (0.0612) (0.0648) (0.0588) (0.0758) (0.0787) Tempreature Controls Yes Yes Yes Yes Yes Yes Humidity Controls Yes Yes Yes Yes Yes Yes Soil Quality Yes Yes Yes Yes Yes Landlocked Dummy Yes Yes Yes Yes Yes Natural Resources Yes Yes Yes Yes Legal Origin Dummies Yes Yes Yes Continent Dummies Yes Yes Size of Largest Ethnic Group Yes Observations R-squared Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1
20 Residual analysis Jack-knifed residuals COG GAB ISR JPN BWA SGP TUR COL TTO GMB CHN MEX ITA NAM BRA URY ESPFRA NGAZWE SWE TGO PRY GRC KOR BFA SDN GBR HND PAN HUN GIN MYS BELDNK GNB ZMB MNG GTM TUN USA NER CIV MDG SEN NIC DOM ZAF CHL PAK SLE LBR CMR SYR JAM CRI LBY NZL AUS MLI VNM IND GHA AGO IDN LKA ECU BGR PER POL PRT FIN CHE KEN NOR BOL EGY DZA THA VEN CAN AUT MOZ TZA NLD HTI SLV IRL GUY ARG UGA PHLMAR DEU JOR BGD MWI YEM ETH Fitted values Figure: Plot of Jack-knifed residuals and fitted values
21 Table: Effect of ELF on GDP per capita controling for average distance from official language Dependent variable - Log GDP per capita in 2000 US constant dollars (1) (2) (3) Ethno-Linguistic Fractionalization *** *** 1.134** (0.333) (0.383) (0.544) Avg. Protection against 0.615*** 0.540*** Expropriation risk (0.0579) (0.0519) Average Distance from Official Language *** (0.428) Observations R-squared Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1
22 ELF and link to language policy Show how ethno-linguistically fractionalized polities likely to choose languages belonging to no indigenous group. Rationale - nation building, avoiding conflict. Ethnically neutral policies however might be not neutral when looked from class perspective. Path-dependence implies former colonial language choices. Is negative effect of ELF found in the literature an artifact of the positive correlation between distance and ELF?
23 Methodological concerns Omitted variable bias Apply AET (2005) methodology Results suggest selection on unobservables would need to be 1.7 to 2 times stronger than selection on observables. Endogeneity Instrument - use genetic distance of indigenous population from population to which official language belongs. Does it still meet exclusion restriction?
24 Other work in progress Compliment with analysis at the sub-national level Compare South vs. North India? Hindi belongs to Indo-European family; South Indian languages to the Dravidian family. Other suggestions? Why sub-optimal langauge policy? An elite based capture model. Compare average incomes of top 1% or 0.05% - slope with average distance should be zero or turn positive?
25 THANK YOU
26 Figure: Family Tree back
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