Quick: name all the development economists who work in Yemen

Okay. One, Daniel Egel.

Two, ah… well. Uhm. Well there’s… wait no.

OK. Just Dan Egel. New U.S. fear-territory number one, and he seems to have cornered the economic market. Well done.

His job market paper looks at ethnic diversity and corruption in Yemen. Patronage is a central part of political control. How is it distributed? Largely through education. Villages receive funding based on the number of pupils and thus exaggerate this number with ghost students and teachers. And patronage varies systematically with the diversity of ethnic groups:

I find that district-level diversity has a significant negative impact on both measures of patronage. Thus, districts with more tribal confederations have fewer ghost pupils and ghost teachers.

I also find evidence that sub-district diversity increases the quantity of ghost pupils and ghost teachers within districts. The contrast between this result and the previous result suggests that tribes play a different role in district and governorate politics. Most tribes have limited power in governorate-level politics. However, each tribe within a district has significant influence as they can make credible threats to disrupt local economic activity.

One conclusion: corruption might get worse with further decentralization. Local institutions and capture matter.

Hat tip to Michael Clemens for the pointer (and the joke).

(P.S. Apologies in advance to the other development economist that works in Yemen, who my readers no doubt will no doubt bring to my attention quickly. You should totally blame Michael.)