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National Identity and Public Goods Provision

Comparative Economic Studies volume 62, pages 1–33 (2020)Cite this article

“I pass through the streets of my country, looking at the national flags hanging from both sides, I feel proud, I feel happy, I do not care that the streets are dirty and collapsed...I’d rather pass through the dirt roads filled with my people and culture, than paved and well made, but empty of my beloved nation.”

– Anonymous.

Abstract

This research investigates the relationship between national identity and public goods provision across a wide range of countries. The analysis shows that national identity, measured based on survey data, and public goods provision, measured by a broad set of indicators, are negatively related. This result is explained through a proposed short-run model on country stability, where the provision of national identity and public goods are substitutable. The findings challenge the conventional wisdom on nation-building as a policy tool for mitigating the adverse effects of fractionalization, suggesting that generally it is used as a tool for governments to divert the attention of its citizens from most pressing issues, such as the provision of elementary public goods.

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Fig. 1
Fig. 2

Source: World Value Survey (average for 1981–2014). The darker shades indicate stronger national identity; the white shades indicate no availability of data

Fig. 3
Fig. 4
Fig. 5
Fig. 6
Fig. 7

Notes

  1. The first subsection of the third section presents the rest of the figures.

  2. Note that there are some conventional forms of public goods provision that can also be used for spreading national identity, such as education. In that case, the provision of national identity goods entangles with public goods provision. The purpose of this research is not to disentangle this relationship, but to investigate the relationship between national identity and the provision of public goods, which are not directly and necessarily used for spreading national identity.

  3. The persistence of the national identity measure also excludes the possibility of a longitudinal analysis.

  4. Table 6 shows that illiteracy loses its significance due to inclusion of a dummy variable for Europe and Central Asia, which indicates that the strong positive correlation between illiteracy and national identity is mainly driven by that region, where illiteracy and national identity are at their lowest levels compared to other regions.

  5. The correlation between absolute latitude and GDP per capita in the sample is 0.6.

  6. The “Western Europe” classification is borrowed from the CIA World Factbook.

  7. The second subsection of the fourth section quantifies the proposed measure of stability and shows that it is positively correlated with a well-known index of stability.

  8. It is reasonable to assume diminishing returns to scale, \(\alpha <1\) and \(\beta <1\); however, the subsequent exploration of the model is not dependent on this assumption and holds for any level of \(\alpha\) and \(\beta\).

  9. An individual utility maximization problem can be set up to derive the amount of tax collected in the country; it will be a function of the weight citizens give to public goods versus private goods and will be directly proportional to the overall wealth of the individuals (country). However, this approach is more relevant for representative democracies and less applicable to a global cross-country setting.

  10. Note that \(c_{x} x\) and \(\beta y\) can alternatively viewed as linear production functions of public goods and national identity.

  11. The positive relationship between the amount of tax collected and level of national identity, for example, has been shown by Johnson (2015), who studied the eighteenth-century France and found that regions with higher tax collection had higher level of national identity.

  12. As Tables 1 and 2 show fractionalization is associated with lower public goods provision, however, the coefficient is not significant for several indicators, which have previously shown to have a negative correlation with fractionalization (Desmet et al. 2012). This might be due to the inclusion of an additional variable on national identity and its dominating adverse effect on public goods provision.

  13. There are only 5 countries in the sample which record national identity lower than 2.8

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Acknowledgements

I wish to thank anonymous referees, the editor, Klaus Desmet, Ruben Enikolopov, Giacomo De Luca, Gunes Gokmen, Omer Ozak, Jonathan Solis, Maurits van der Veen, and Shlomo Weber for helpful discussions and comments and to the participants of the 2017 NES-HCEO Summer School, 2017 Annual Workshop of the IRES at Chapman University, 2017 Annual Conference of the Association for the Study of Religion, Economics, and Culture (ASREC), VIVES (Research Centre for Regional Economics) seminar at KU Leuven and the 4th Euroacademia International Conference “Identities and Identifications: Politicized Uses of Collective Identities.” All remaining errors are mine

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    Ani Harutyunyan

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Appendix

Appendix

Infant

Illitiracy

Schooling

Infrastructure

Mortality

Rate

Years

Quality

HH

HH

HH

HH

Australia

Uzbekistan

Australia

Kuwait

 

Trinidad& Tobago

 

Australia

   

Qatar

HL

HL

HL

HL

Tanzania

Pakistan

Rwanda

Ecuador

Ghana

Mali

Pakistan

Tanzania

Bangladesh

Egypt

Tanzania

El Salvador

Pakistan

Tanzania

Mali

Colombia

Burkina Faso

Ghana

Guatemala

Yemen

Mali

Burkina Faso

Yemen

Zimbabwe

Yemen

Yemen

Bangladesh

Bangladesh

Rwanda

Bangladesh

 

Ghana

 

Rwanda

  

LH

LH

LH

LH

France

Moldova

Estonia

Czech Rep

Belarus

Bosnia& Herz

Japan

Estonia

Belgium

Latvia

Lithuania

Belgium

Denmark

Lithuania

Hong Kong

Sweden

Estonia

Russia

Germany

France

Switzerland

Belarus

Sweden

Denmark

Sweden

Bulgaria

Slovakia

South Korea

Japan

Estonia

Netherlands

Germany

Czech Rep

Serbia

Belgium

Japan

South Korea

Ukraine

Bulgaria

Slovakia

Bosnia&Herzeg

 

Ukraine

Bahrain

Netherlands

 

Czech Rep

Belarus

Slovakia

 

Denmark

Ukraine

Lithuania

 

Switzerland

Switzerland

Germany

 

Russia

China

  

South Korea

Netherlands

   

Hong Kong

LL

LL

LL

LL

NONE

NONE

NONE

NONE

  1. HH (High–High)—High national identification and High public goods provision, HL (High–Low)—High national identification and Low public goods provision, LH (Low–High)—Low national identification and High public goods provision, LL (Low–Low)—Low national identification and Low public goods provision. The segments are defined based on the lower and upper quartiles of the two measures

See Fig. 8 and Tables 6, 7, 8, 9, 10, 11, 12.

Fig. 8
figure 8

National identity and other public goods outcomes. Notes: the figures depict the relationship of national identity with measures of health care and access to public services. The grids are defined based on the lower and upper quartiles of the two measures. Most of the countries are located in the HL or LH segment, and a few countries are in the HH segment. There are no countries in the LL segment with an exception of Lebanon, which together with low national identity records also low immunization rate

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Table 6 National identity and illiteracy
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Table 7 National identity and public goods provision with additional controls
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Table 8 National identity and public goods provision with additional controls
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Table 9 National identity and public goods provision, excluding Western Europe
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Table 10 National identity and public goods provision, excluding Western Europe
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Table 11 National identity and public goods provision, latitude instead of GDP
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Table 12 National identity and public goods provision, latitude instead of GDP
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Harutyunyan, A. National Identity and Public Goods Provision. Comp Econ Stud 62, 1–33 (2020). https://doi.org/10.1057/s41294-019-00101-3

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Keywords

  • National identity
  • Public goods
  • Fractionalization
  • Country stability

JEL Classification

  • F59
  • H13
  • H20
  • H40
  • H50
  • Z10