Economic Openess, Disciplined Government and Ethnic Peace

Abstract

Many studies have examined the determinants of ethnic conflicts in multi-ethnic developing countries and report a myriad of contributory factors. It is natural to observe many correlates because ethnic wars tend to gain their own momentum and proceed for variety of reasons that are not directly related to the initial causes. Some intervention is necessary to end an ethnic war. The objective of this exercise is to draw attention to conditions necessary to sustain ethnic peace. Good governance and high and shared growth often top the list of conditions necessary to achieve ethnic peace. How to get good governance to developing countries is the key question of interest. To long for an enlightened leader to emerge and set everything right is utopian. In this exercise we argue that openess to foreign trade and investment is a more assured condition to achieve good governance and high growth. Openness acts as a disciplining force on government regardless of whether they are democratic or authoritarian. A theoretical framework and empirical evidence are presented to support the hypothesis.