Status inequality and public goods

The association between social diversity and state-provided public goods is a central political economy problem. This paper highlights how status inequality is a distinct political channel when diverse groups are spatially segregated. Social status impacts citizens' ability to petition the state successfully and modulates state favoritism or discrimination. We use data from nearly 600,000 Indian villages to show that caste-based status inequality modifies the effect of diversity on local public goods politics. Diversity only negatively impacts local public goods in units where lower-caste groups are numerically preponderant. Such diversity deficit is further amplified when higher-caste groups numerically dominate larger administrative units and lower-caste groups are segregated.