Ethnolinguistic diversity as a potential economic benefit for countries: Implications for international political economy

There is a prevailing opinion, in the field of International Political Economy, that ethnolinguistic diversity has a negative impact on the economic performance of countries. Some of the scholars, however, have argued against it and stated that, under certain circumstances, the negative impact of diversity is mitigated or even reversed. According to them diversity can have a positive impact on the economy.; The dissertation took upon the endeavor to examine this proposition within the context of the OECD countries, and to see to what extent this argument is supported by the data. The dissertation began from identifying the conditions under which ethnic diversity can bring positive economic outcomes. It based its quest of the moderating variables on the organizational science, where the scholars have conducted extensive research concerning the impact of diversity on the performance of firms. Then, the dissertation transposed the research to the level of countries and designed a statistical model to assess the impact of ethnolinguistic diversity on economic outcomes, which were defined in terms of innovation. The dissertation stated the hypothesis that, in the presence of the right context, ethnolinguistic diversity leads to higher levels of innovativeness and thus, constitutes an economic benefit for countries.; The statistical analysis, which included factor analyses and simple cross-country regressions, provided support for the hypothesis. The results of the regressions have shown that, for the OECD countries, ethnolinguistic diversity, when accompanied by the right context, indeed leads to higher levels of creativity, openness and innovativeness. The Innovation Focused Strategy and Democratic Pluralism emerged as the main moderators of the positive relationship between diversity and innovativeness. The results have also somewhat supported the Growth Focused Strategy as one of the moderators.; The dissertation results have direct relevance for the discussions in the field of International Political Economy concerning the matter of state unity. They indicate that there is a value in heterogenous societies, which is related to higher innovativeness. Therefore, the international community should encourage the functioning of multiethnic states and discourage secessions, at least in relation to advanced economies.