Diversity enforces social exclusion: Does exclusion never cease?

Diversity is a complex, multidimensional and worldwide phenomenon. It has been important for the prosperity of any country since globalization. Due to its multidimensionality, there are numerous definitions used to explain the concept of diversity. Ethnic heterogeneity and religious divisions have become burning global issues (Azam, 2001). It is truly hard to find any place or field where there is no existence of more than one ethnic or religious group. The flow of ethnic groups within totally different cultures and norms is increasing in volume every year (Barth, 1998; Bates, 2000; Castles, 2000; Sung, 2014). Cross-border communities and the coexistence of multiple communities in local spaces are common, not the exception. A more severe challenge relates to maintaining cohesiveness when people discriminate on the basis of emotional, cultural and religious identities. However, international migration, as well as persistent social changes and pluralism, are having an economic, social and political impacts around the world.

Diversity plays a central role in societal transformation but higher diversity often limits equal opportunity to all the members of society (Thomas & Ely, 2001) and can be the cause of social exclusion. Social exclusion is essentially social disadvantage and relegation to the fringe of society (Simandan, 2010). This terminology is well understood across disciplines such as psychology, sociology, politics, education and economics (Peace, 2001;Silver, 2007). The United Nations Development Program (UNDP) virtual round table defined exclusion as any distinction, restriction or preference, which is based on grounds such as race, colour, sex, language, religion, social class, and consequently nullifies or impairs the recognition, enjoyment or exercise by all persons, on an equal footing, of all rights and freedoms (Peace, 2001;UNDP, 2011), Diversity is one of the main components which causes societal alteration and which in turn forces individuals in the direction of exclusion or the margins of society. (Walsh, 2006;Young, 2002). Levitas et al. (2007) showed that diversity affects the well-being of individual's, equity and cohesion of society (social inclusion) as a whole. The result can be an exclusionary process whereby people are cut off for a significant period of their lives from institutions and services, social networks and developmental opportunities that the great majority of society enjoys . Aasland and Fløtten (2001) argue that social exclusion is about more than income poverty and becomes more critical when people or areas face a combination of linked problems, such as discrimination, poor skills, low incomes, unemployment, poor housing, high crime and family breakdown (Amin & Ahmad, 2018;Jehoel-Gijsbers & Vrooman, 2007). These problems are linked and mutually reinforcing (Unit, 2004). These excluded individuals show inability to participate in the basic social, economic and political process of the society (Peleah & Ivanov, 2013;Thorat & Neuman, 2012) and are more likely to break the rules and fail to follow social norms of the society . Rawal (2008) explore the extent or deepness of social exclusion by elaborating on the multifarious aspects of culture, institutions and social deprivation. The strength of social exclusion is derived through social deprivation/distinction to poverty, exclusion from intergroup class, norms status and political power (Benington & Geddes, 2013). In this view, social exclusion theoretically emerges from insufficient access to social rights, material deprivation, limited social participation and a lack of normative integration. It is then regarded as the combined result of macro-societal changes including social, demographic, economic, labor market developments, social norms, government legislation and social policy (Vrooman & Hoff, 2013). Levitas (2004) pointed out that dealing with social exclusion as a single discourse for Europe would be unfair and inappropriate as it is spreading all over the world rather than only in advanced economies. The different patterns of exclusion increase day by day, which damages the prosperity of the country. Cultural factors, namely ethnic diversity has also received much attention in relation to building social cohesiveness. A strong but mixed relationship exists between diversity, social cohesion and institutional quality (Amin, 2019;Ellis, Beaver, & Wright, 2009;Hooghe & de Vroome, 2016), which is mostly based on geographical areas, such as the sphere of exclusion is different in heterogeneous communities as compared to homogenous communities (Ellis et al., 2009). In this modern era, where societal development is putting people towards the centre of development processes, social inclusion is found to be a critical component for economic development and sustainability of a country (DESA, 2007). On the other hand, diversity can create conflict and clashes in societal development. The aim of this study is to analyse diversity (ethnic or religious) and social exclusion from a worldwide perspective.
The rest of the paper is as follows: Section II consists of the theoretical framework. Section III contains methodology and data sources. The next section highlights empirical results and the last section concludes the study, providing brief policy recommendations based on the findings.

Theoretical Framework
Recent literature shows various determinants of social inclusion/exclusion and its relationship with wellbeing. The development process started by Sen's claims, that the capability approach is not a theory of justice or equality, but a theory of a society which directly links high levels of wellbeing and quality of life (Robeyns, 2005).
According to relational theory, to create a society in which there is equal respect, regardless of whether there is any actual material equality of condition, what matters is the relations between people in a diverse society (Rosen, 2004). The provision of sufficient capabilities in heterogeneous communities is required so that no-one is forced to feel ashamed of their circumstances. However, the theory of social exclusion is related to choice, welfare and fairness for each individual within society, and how goods are provided (Barry, 2002).
Many have suggested, that the capability approach is not a neutral formation of a person's good and hence cannot be a theory, at least not a liberal theory, or theory of justice (Schumpeter, 2017). In this context, capability approaches are considered the best way to conceptualize social exclusion, (Fleurbaey, 2002;Robeyns, 2005). So the concern with social exclusion can be seen by combined effects of capabilities theory of social justice 1 and the theory of equality of opportunity (Miller, 2006). This approach reflects the multidimensionality of social exclusion (Levitas et al., 2007).
Interestingly, Wolff and De-Shalit (2007) and Esping-Andersen, Gallie, Hemerijck, and Myles (2002) have both endorsed the capability approach but not as a theory of quality of life or social welfare. They focus on providing a minimum level of functioning as a way of addressing disadvantage. They have argued that clusters of disadvantage are created, much like the set of mutually reinforcing linked problems that are the concern of analysts of social exclusion. These interlinked problems are the most critical for social action and present empirical questions for social welfare and decision-makers.
Furthermore, the theory of relational equality does insist upon a sufficient level of functioning, as to ensure respect among citizens (Vigoda, 2002). However, most individuals excluded from social opportunities relate or identify as a marginalised underclass (Lister, 1998). Such groups often experience 'exclusion' from mainstream society not only in an economic sense, but also as a cultural, political and organisational phenomenon (Karlsen & Nazroo, 2002;McAdam, 2000). The focus on citizenship also links with one of the key problems experienced by theorists of social exclusion; the issue of inclusion and social diversity (Uslaner, 2012).
The question of how to combat social exclusion, poverty, and ethnic discrimination is discussed today in tandem with calls to increase economic efficiency, growth, and deregulation of the labour market (Silver & Miller, 2003). Talk about diversity has become social and political rhetoric that conceals growing unregulated new forms of discriminatory ethnic divisions. By using the theoretical framework and empirical studies of Alesina et al. (2003), this study analyses the direct effect of religious and ethnic diversity on social exclusion, through adopting the standard model of Jehoel-Gijsbers and Vrooman (2007) such as; #,% = + * ( ) # + * ( ′) # + #,% Whereas, "SE" indicate indicators of social exclusion, "div" shows the diversity both ethnic and religious, "X'" shows the other control variables such as GDP per capita, urbanization, education and health expenditure, population density, literacy rate, institutional quality and "et" is the error term.

Methodology and Data Sources
In order to find the relationship between diversity and social exclusion, this study used panel data methodology to explore this nexus and dynamics for empirical analysis. Basically, panel data methodology is the mixture of cross-sectional and time series data which does not just increase the power and size of data but also restructuring or re-examining effects that are difficult to distinguish with only cross-sections or time series data (Hsiao, 1986). Baltagi and Kao (2001) describes the key advantages of using panel data, such as how heterogeneity in countries is absent when using aggregate time series data. Panel data permits more variability, less collinearity among variables, while the cross sections of time series provide more degree of freedom and more efficiency when estimating models.
Panel data under fixed effect can be expressed as; *% = * + *% 6 + *% Whereas t = 1…..T, i = 1……N and *% is the error term. In a fixed effects model, the unobserved variables are permitted to have any relations whatever with the observed variables. This shows the rationality following the assumption of the relationship between error term and outcome variables. One of the important assumptions of the fixed effect model is that time-invariant characteristics are unique and should not be correlated with other characteristics of the individuals. So, this technique is more suitable to empirical testing the relationship between diversity and social exclusion.
Dataset of all the variables used in this paper are freely available/access for empirical testing. 2 This paper initially looks at the relationship between diversity and social exclusion by using panel data analysis of 187-countries (listed in appendix), for the time period from 1990 to 2010 with time interval of averages of 05-years. Diversity is measured by using the following formula of Alesina et al. (2003) such as; = − D Whereas, is the share of group i, (i=1……N) in the country j. The range of the result is between 0-1. Zero "0" means a homogenous country and "1" shows total heterogeneity in a country. Social exclusion means excluded individuals from society on the basis of economic, political and civic participations. 3 This study therefore followed the definition of UNDP (2013) for measurement of social exclusion (in form of exclusion from economic, public services and civic and public participations).        The results indicate that diversity either ethnic or religious present enormous obstacles in development processes and variously contribute to social exclusion. In above tables 1a-1c and 2a-2d (using different proxies of each indicator of social exclusion) a robust relationship between diversity and social exclusion emerges using data from 187-countries. However, table-3 shows the direct effect of diversity on social exclusion (by created indices of economic exclusion, exclusion from public services and exclusion from civic and pubic participations). The results indicate that diversity (ethnic and religious) has a significant positive impact on social exclusion. Becker (1962) illustrates theoretically that discrimination in society can create prejudice that could lead to lower outcomes. The results are more illuminating in the regards that diversity appears to cause not only economic exclusion but also results in the exclusion of individuals from public services and civic/public participations. However, there are obviously numerous explanations for how diversity contributes toward social exclusion worldwide.

Empirical Results
Firstly, higher diversity increases chances of conflict within society and the market place which ultimately results in low income, less economic development and low institutional quality (Alesina & Rodrik, 1994;Alesina & Spolaore, 1997;Alesina & Tabellini, 1989;Easterly & Levine, 1997;La Porta, Lopez-de-Silanes, Shleifer, & Vishny, 1999;A. Sutherland, 1997). Secondly, ethnically polarized societies have difficulty agreeing on public goods like infrastructure, education, and public policies. It further brings about two fundamental setbacks, which are endemic diseases for development, i.e. rent-seeking activities and incongruity on public policies (Easterly & Levine, 1997). Thirdly, ethnic and regional competition tends to degrade the institutional foundations of the economy such as when ethnic and personal attachments are the leading principle rather than the rule of law, ultimately contributing toward the deterioration of public institutional capacity (Nafziger & Auvinen, 2003). These results are similar to Delhey and Newton (2005) and Dincer and Wang (2011) where they argued that diversity diminishes economic development and quality of institution because the ethnocentric members of an ethnic group favour their group members over others (Glaeser & Saks, 2006;Nafziger & Auvinen, 2003;Treisman, 2000;Van den Berghe, 1994). Appasamy, Guhan, Hema, Majumdar, and Vaidyanathan (1996) indicate religious diversity is one of the prominent indicators of social exclusion. Bardsley and Flatley (1998) have argued that diversity in form of social class race, religious and ethnicity results in more exclusion for individuals denied equality of opportunity in areas of education, health, employment, basic needs and enjoyment of life. The current study's findings support this conclusion. People belonging to certain groups are disproportionately excluded from the benefits of achieving their full human potential and enjoying dignity and social standing. Mason, MacGillivray, Steel, and Wilson (2003) have produced a step by step guide to community sustainability indicators and found that diversity has direct impact on socioeconomic development because it impacts civil society, social development and institutional performance of a country. Socially excluded people are more likely to be involved in breaking institutional rules (formal and informal) because they are not treated equal in society in all aspects and bypass the rules, regulations and social norms (Ananiev, Atanasov, Gerovska-Mitev, & Shukarov, 2011;Mathieson et al., 2008).
Other control variables such as GDP per capita, education expenditure and institutional quality show significant impact on social exclusion. These results are supported by the literature as increasing the GDP per capital, educational expenditure and institutional quality reduced the effect of social exclusion (Lechman, 2014;Levitas et al., 2007;J. Sutherland, 2001).

Conclusion and policy implication
This study aimed to show the relationship between diversity (ethnic and religious) and different dimensions of social exclusion, i.e. economic exclusion, exclusion from public services and civic/public participation, using data from 187-countries of the world. In order to judge the nexus between dependent and independent variables, panel data methodology was used in empirical analysis. The results elucidate the strong significant positive relationship between diversity and social exclusion and the need to redress this if the aim is to avoid creating more conflict among diversified groups which in turn, undermine society and institutional quality (Easterly, Ritzen, & Woolcock, 2006). Diversity accompanied by weak institutions divides the society posing risks for religious and cultural confliction, civil wars, social tensions, political violence and unrest, corruption and are a recipe for underdevelopment (Alesina & Rodrik, 1994;Alesina & Spolaore, 1997;Alesina & Tabellini, 1989;Easterly & Levine, 1997;La Porta et al., 1999;A. Sutherland, 1997). The literature also shows diversity can create weak public institutions since 'elites' or those in positions of privilege have no time or willingness to contribute towards the growth of the national economy to reduce inequalities (Keen, 2000;Väyrynen, 2003). In this contemporary world, multi-ethnic cultural states of different races, colour, language, religion and regions are commonplace. Hence, diversity has important implications to improve social development globally. The findings of this study demonstrate that diversity is another important and significant variable affecting socioeconomic development and suggests that economies can prosper by better managing heterogeneity.
This study acknowledges that diversity cannot be reduced; however, its effects can be minimized by providing equal opportunities to all the individuals of the society, in order to create a secure and peaceful society through shaping the economic life of a country in a variety of ways and by promoting more cohesiveness. In this regard, there are some lessons to be learned from countries where there are numerous religions, race and cultures celebrated. For instance, celebrating various religious/festive days and showing respect for each other in public forums. Although, achieving diversity and respect for people is a challenge all over the world, there is also good progress being made in some corners of the world.

Limitations and Prospects for Future Researches
Every study has some limitations which require researchers to interpret the results within certain parameters. This study has also its limitations regarding limiting scope to consider the relationship between diversity and social exclusion. In addition to this, diversity is a multidimensional concept, i.e., demographic, socioeconomic, political, geographical cultural and dynamic in nature, so this study does not claim that the variables included are the only determinants or predictors of social exclusion and diversity. This study has also some limitations regarding the weakness of data on social exclusion, because this study used different proxy measures to undertake an empirical analysis of social exclusion.
The study of social exclusion is a vast field. Future research may seek to analyze some other factors (e.g. judicial, deterrence, ecological) that are related to diversity and social exclusion. Future researchers may also seek to collect their own data instead of using secondary data which may increase the reliability and validity of findings and reveal other socioeconomic determinants of exclusion. This study uses diversity on the basis of ethnic and religious differences only, whereas other determinants of diversity such as gender, may be opportunities for further research. It is also acknowledged that the current study did not include any political or ideological variables.