Rohini Somanathan, 2018. Working papers 294, Centre for Development Economics, Delhi School of Economics.
Measures of social difference such as the Ethnolinguistic Fractionalization Index (ELF) and Polarization are commonly used proxies for community heterogeneity. They are used to “explain” collective outcomes ranging from voluntary contributions in elementary schools to civil wars. This essay reviews this literature in the face of new research on identity and collective outcomes. I argue that methods of social classification often seriously mis-measure identity and difference and that poverty rather than heterogeneity is often the source of community failures. Experiments on deliberative democracy offer important insights into how diverse societies can flourish.