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Ethnic Segregation and Public Goods: Evidence from Indonesia



This article contributes to the study of ethnic diversity and public goods provision by assessing the role of the spatial distribution of ethnic groups. Through a new theory that we call spatial interdependence, we argue that the segregation of ethnic groups can reduce or even neutralize the “diversity penalty” in public goods provision that results from ethnic fractionalization. This is because local segregation allows communities to use disparities in the level of public goods compared with other communities as leverage when advocating for more public goods for themselves, thereby ratcheting up the level of public goods across communities. We test this prediction on highly disaggregated data from Indonesia and find strong support that, controlling for ethnic fractionalization, segregated communities have higher levels of public goods. This has an important and underexplored implication: decentralization disadvantages integrated communities vis-à-vis their more segregated counterparts.


Corresponding author

Yuhki Tajima is an Assistant Professor, Edmund A. Walsh School of Foreign Service, Georgetown University, 3700 O St. NW, Washington, DC 20057 (
Krislert Samphantharak is an Associate Professor, School of Global Policy and Strategy, University of California, San Diego, 9500 Gilman Drive, La Jolla, CA 92093 (
Kai Ostwald is an Assistant Professor, School of Public Policy & Global Affairs and Department of Political Science, University of British Columbia, C.K. Choi Bldg #224, 1855 West Mall, Vancouver, Canada V6T 1Z2 (


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We thank participants at the Georgetown Political Economy Workshop, Bank of Thailand Workshop, Diana Kim, Irfan Nooruddin, Erik Voeten, six anonymous referees, and the editors of the APSR for helpful comments and discussion. We are grateful for funding from the Pacific Rim Research Program and the Institute on Global Conflict and Cooperation. All errors are our own. Replication files can be found on the American Political Science Review Dataverse:



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Ethnic Segregation and Public Goods: Evidence from Indonesia



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