Public goods and ethnic diversity: evidence from deforestation in Indonesia

This paper shows that the level of deforestation in Indonesia is positively related to the degree of ethnic fractionalization. To identify a causal relation we exploit the exogenous timing of variation in the level of ethnic heterogeneity due to the creation of new jurisdictions. We provide evidence consistent with a lower control of politicians, through electoral punishment, in more ethnically fragmented districts. Our results are consistent with the literature on (under) provision of public goods in ethnically diverse societies.