ETHNIC DIVERSITY AND ECONOMIC-REFORM IN SUB-SAHARA AFRICA

Welfare in ethnically divided societies depends on privately owned res ources as well as on a public good, namely cooperation between the var ious ethnic groups. Economic reforms designed to improve efficiency in the allocation of privately owned resources may! have an ambiguous im pact on welfare if they have a negative impact on inter-ethnic coopera tion and political stability. This may provide an additional explanati on of why reforms have failed in a number of countries of sub-Sahara A frica.