Cultural Diversity and Development

An emerging, yet thin, volume of literature provides evidence of strong linkages between cultural and ethnic diversities and economic growth. However, given the fragmented literature and a limited number of studies and contradictory findings, one still finds it difficult to generalise the overall relationship between cultural and ethnic diversities and economic growth. The contradictions in findings run deep along the micro–macro geographical scales, democratic and non-democratic countries, diversities endowed with human capital and low human capital, and cultural diversities developed and evolved along modern Western cultures versus the traditional Southern cultures, etc. The urban and firm-level studies demonstrate social diversity and cultural heterogeneities as driving forces of innovation and economic growth. However, macro (regional and national) studies on determinants of ‘development’ have largely neglected the cultural and ethnic factors and focused largely on economic and political variables. For many, the diversities such as ethnic, religious, linguistic, gender etc. have been regarded as hindrances to development. In this context, Ruttan (1991) wrote: