Ethnic diversity is generally associated with less social capital and lower levels of trust. However, most empirical evidence for this relationship is focused on generalized trust, rather than more theoretically ap
propriate measures of group-based trust. This paper instead evaluates the relationship between ethnic diversity – at both national and local levels – and the degree to which coethnics are trusted more than non-coethnics, a value I call the “coethnic trust premium.”
 
Using public opinion data from 16 African countries, the author finds that ethnically diverse states have, on average, larger coethnic trust premiums. However, within countries, local-level ethnic diversity is actually
associated with less ethnocentric trust. The paper than shows, consistent with these patterns, that diversity is
detrimental to intergroup trust only in the presence of ethnic group segregation.
 
These findings have important implications for understanding interethnic relations, as well as for the policies we design to deal with ethnic conflict.

First, the results demonstrate that the observed relationship between diversity and trust depends crucially on the level of analysis. While this fact has influenced the study of race relations in the United States, it is not yet fully appreciated in the study of intergroup relations in Africa. In particular, these results suggest that the study of micro-level relations between members of different ethnic groups is unlikely to tell us very much about how macro-level ethnic diversity influences political and economic outcomes.

Second, policy makers must consider the potential for policies to have differential effects at different levels of aggregation. For example, while proponents of conflict theory advocate for the separation of ethnic groups, both spatially and politically, as a means to reduce conflict, contact theory is regularly used to justify policies that promote ethnic and racial integration locally. This study suggests, at a minimum, that appropriate policy solutions to ethnic conflict must appreciate the potentially countervailing effects of diversity at different levels of interaction.

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