Reciprocity and Prejudice: An Experiment of Hindu-Muslim Cooperation in the Slums of Mumbai

The dissertation develops and tests a new theory to explain intergroup cooperation and outgroup discrimination. The theoretical part specifies under what conditions ethnic differences undermine public goods provision and exacerbate ethnic discrimination. It posits that people cooperate more with and discriminate less against the groups expected to reciprocate cooperative behavior. Conditional cooperators rationally update their group stereotypes based on their experience with the groups' individual members. This change in turn reduces prejudice and discrimination. I tested observable implications of the model on a representative sample of more than 400 slum-dwellers in Mumbai. The field research in India combined laboratory experiments, an original survey, and interviews. Once I manipulated expectations of reciprocity, ethnically heterogeneous groups produced as much public goods as the homogeneous ones. The experimental treatment also radically increased trust and reduced ethnic discrimination of the generally mistrusted Muslim minority. The survey analysis compared the real-life effect of reciprocity with prominent alternative explanations from the literature. Compared to other factors, positive reciprocity provides a powerful explanation of why people choose to discriminate against some, but not other ethnic groups. The cross-national chapter of the dissertation extends the analysis beyond India. Using surveys from 87 countries, it shows that generalized trust moderates the negative effect of ethnic diversity on people's willingness to contribute to public goods

Is ethnic diversity a poverty trap? : a complex relationship between ethnicity, trust, and tax morale

Much research indicates that ethnic diversity leads to suboptimal public goods provision and hinders economic development. However, similar levels of ethnic diversity are often associated with very different outcomes. This paper specifies under what conditions ethnic differences undermine tax compliance in multiethnic societies. Based on multilevel modeling of survey data from 70 countries, the paper shows that people belonging to small ethnic minorities in countries with a high level of ethnolinguistic fractionalization are also those the most willing to accept tax evasion. However, generalized trust and trust in the government moderate the relationship between ethnic fractionalization and tax morale among small ethnic groups. The analysis suggests that ethnic diversity is not a poverty trap because its effect can be largely offset by measures increasing interpersonal trust across ethnic lines and trust in political institutions. The paper uses a new dataset that identifies World Values Survey respondents’ membership in politically relevant ethnic groups