This paper explores evidence supporting a diversity dividend. The dividend hypothesises a positive
association between ethnic diversity and development. Thus, it challenges research that has led to
the received wisdom that ethnic diversity is detrimental to development. Evidence for the dividend
was uncovered through a systematic literature search and query of experts in relevant fields. The
topic was also explored through country and city level case studies chosen in collaboration with the
UK Department of International Development (DFID). The case studies provide long-run perspectives on how Singapore, Mauritius and London have experienced ethnic diversity.
Although the findings show neither definitive trends or easily transferable policy implications, some consistent themes emerge.
An increasing number of authors argue that a diversity debit is far from universal. Attention must, therefore, be paid to where and under what conditions different associations between diversity and development arise.
Diversity dividends are best explored at the sub-national level, in regions, administrative areas, cities, neighbourhoods and firms. This is because when ethnic interactions take place within these units of analysis, they avoid the problems of the artificiality of national borders and it is easier to control for potentially conflating variables.
Much of the evidence for a diversity dividend is found within studies exploring debits. However, dividends are often identified over the long-run when changes in societies’ ethnic compositions and developmental outcomes can be seen against other conditions.
Findings suggest that there may be a ‘diversity paradox’, with initial increases in diversity leading to unwanted affects and dividends arising as groups mix over generations. This implies a trade-off for countries looking to manage their own diversity or to benefit from global migrations.
More data is available for understanding how diversity affects development in developed countries. However, innovative methods are being tested to better measure diversity and uncover evidence of development in developing nations.
Diversity dividends, like all developmental outcomes, are often unevenly distributed. Studies are only beginning to uncover who benefits from them in different contexts and who remains locked out. This is particularly pressing in global cities that rely on immigration to fuel their economic models.
Tom Kirk, Danielle Stein & Annette Fisher (2018). The Relationship between Ethnic Diversity and Development: A Diversity Dividend? Konung International, 162p