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Public Choice

Is Tolerance Good or Bad for Growth?

Journal Article
Berggren, Niclas and Mikael Elinder (2012). “Is Tolerance Good or Bad for Growth?”. Public Choice 150, 283–308.

Niclas Berggren, Mikael Elinder

We investigate how tolerance, as measured by attitudes toward different types of neighbors, affects economic growth in a sample of 54 countries. Unlike previous studies, by Richard Florida and others, we find that tolerance toward homosexuals is negatively related to growth. For tolerance toward people of a different race, we do not find robust results, but the sign of the estimated coefficients is positive, suggesting that inclusion of people irrespective of race makes good use of productive capacity. We propose mechanisms to explain these divergent findings, which clarify why different kinds of tolerance may be of different economic importance.