Chapter Four: Institutions and the Management of Ethnic Diversity

The democratic problem in a plural society is to create political institutions which give all the various groups the opportunity to participate in decision-making, since only thus can they feel that they are full members of a nation, respected by their numerous brethren, and owing equal respect to the national bond which holds them together. It is necessary to get right away from the idea that somebody is to prevail over somebody else; from politics as a zero-sum game. Group hostility and political warfare are precisely what must be eradicated if the political problem is to be solved; in their place we have to create an atmosphere of mutual toleration and compromise. (Arthur Lewis, 1965)

Ethnicity is relevant to economic development because it structures intersubjective encounters between participants in states and markets. The four causal narratives I have describedethnic capital, capital loss, latent costs and policy perversityare analytically distinct, but they share one common thread. All four are the consequence of subjective and politicized distinctions between members of different groups, and they are activated by tension at the margins between communities. This chapter develops a theoretical basis for the claim that institutions can influence inter-ethnic encounters and modify ethnic diversitys impact on economic development. It proposes that inclusive social and political institutions have been centrally important to the successful accommodation of ethnic diversity in Mauritius, and therefore to the islands path of sustained economic development. At independence, the new nation-building elite inherited a complex set of institutional resources and strong incentives to pursue the difficult projects of economic development and democratic consolidation. Faced with the challenging task of building a single nation from fragmented communal segments, Mauritius developed new, integrative national institutions engineered to manage

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ethnic diversity. By rewriting the rules of the game and creating an atmosphere of toleration and mutual compromise, these institutions have contributed to the successful political and economic development of Mauritius. Ethnicity and Institutions: A Theoretical Approach Ethnicity involves both subjective identification and the intersubjective communication of cultural differences (Eriksen 1998). As a symbolic and normative system, it structures what Habermas (1987) calls the social or the matrix of shared norms and communicative resources that constitute the cultural basis for social interaction. At the micro-level of social relations, the narratives of ethnic capital formation, capital loss and latent costs occur because ethnic identities influence the social choices and behaviors of individual actors in intersubjective encounters with others. At the macro-level, democratic institutions can translate ethnic identities into coalitions that influence policies in particularistic directions; hence the existence of ethnically based policy perversity. Ethnicity is a major structural feature of lifeworlds in plural societies because it helps define acceptable sets of social action (Eriksen 1999). Ethnicity, however, is not the only structural dimension of the lifeworld. A broader view of intersubjective encounters understands the rules of the game as institutions, defined by Douglass North (1993) as the humanly devised constraints that shape human interaction. Because the world is too complex for individuals to navigate its infinite possibilities, individuals use subjective heuristic models to simplify interactions with others. Those subjective models, informed by social norms and patterns of behavior, facilitate decision-making under conditions

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of imperfect information about the external world and the other individuals who inhabit it. Institutions aid decision-makers in their assessments of how to behave in intersubjective encounters and help them predict the consequences of various courses of action. Broadly speaking, institutions are collectively understood norms and procedures that lubricate complicated social exchanges. Though they take many different forms, institutions can be broadly disaggregated into formal and informal types. Formal institutions are attached to the state apparatus and include the political and bureaucratic rules of the game. They define the rules of political engagement and tend to be codified in constitutional guarantees, laws, and judicial decrees. By contrast, informal institutions include social traditions and the diffuse systems of norms and ideological commitments that structure social interaction, but are not necessarily connected to state authority. Both kinds of institutions translate the complex phenomena associated with social action into simpler incentive systems to which individual actors can respond. Ethnicity, then, is part of a broad class of social institutions that inform individual and group behavior. Indeed, the existence of plural societies, which Rabushka and Shepsle (1974) define as societies where sub-national ethnic cleavages are politically dominant, demonstrates both the enduring power of ethnicity and the importance of supra-ethnic, national institutions. Though ethnicity may be the most salient political cleavage in a plural society, individuals in these societies are by definition embedded in a network of other social, political and institutional commitments, including obedience to the overarching political

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framework of the nation-state. As argued in Chapter One, the state controls national policies and therefore powerfully structures individual incentives. Norms and discourses articulated at this institutional level are therefore capable of influencing intersubjective encounters at all levels of social interaction. The existence of multiple, overlapping institutional norms means that ethnic diversity is not an insurmountable obstacle. As Ralph Premdas (1995) notes, institutional engineering can seek to depoliticise many areas of contention between ethnic groups. The four ethnic political economy narratives described in Chapter One should not be treated as inevitable consequences of ethnic diversity. Each causal narrative is triggered by ethnic identification, but ethnic identity is only one of many parts of an individuals subjective and normativethat is, institutionalcommitments. Institutional norms and contexts texture and modify social identities; therefore, they can diminish or intensify the relative importance of ethnic identification. Variations in institutional design, then, directly influence the net balance of ethnic diversitys impact on economic development. William Easterly (2001b) argues that high quality institutions constrain the amount of damage that one ethnic group could do to another, and while this is certainly true, the theoretical arguments advanced above indicate that good institutions can do much more. Institutions can channel intersubjective encounters to avoid the pathologies associated with communalist behavior. They can encourage individuals to employ more inclusive heuristic models when interacting with others, rescripting tense encounters with ethnic others into exchanges with fellow citizens. Even in

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countries with deep social cleavages and highly injurious encounters between ethnic groups, a comprehensive picture also shows accommodation, reciprocity, Rothchild 1997). Integrative institutional processes demonstrate the capacity of inclusive arrangements to overcome the exclusive norms of ethnic interaction. By influencing incentives at the level of individuals intersubjective encounters, good institutions can positively influence ethnically linked economic outcomes. It is the contention of this chapter that supra-ethnically inclusive institutions account for much of Mauritius post-colonial development. Methodology If we cannot see, feel, touch, or even measure institutions because they are constructs of the human mind, how are we to analyze their role in mediating ethnic interactions (North 1993)? Institutions may be diffuse abstractions, but they reify themselves in observable rules and patterns of organizational behavior. This chapter will analyze historical inheritances from the colonial era and institutional arrangements developed in the post-colonial period to identify the root causes of successful ethnic accommodation in Mauritius. Furthermore, it will adopt an explicitly comparative approach. Whereas Chapter Three made extensive use of theoretically constructed counterfactual situations that compared Mauritius to homogeneous societies, this chapter will compare Mauritius to other plural societies to isolate the impact of institutional arrangements. Though I will contrast Mauritius with several plural societies, I will make intensive use of comparisons to Guyana, a country with a similar history and ethnographic landscape, but with

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very different institutions and political economic outcomes. See Appendix C for comments on unit homogeneity in comparative studies. Decolonization and Institutional Change In the years following independence, Mauritius seemed headed down a path of protracted internecine ethnic conflict. In 1974, Alvin Rabushka and Kenneth Shepsle cited the notable absence of moderation in ethnic political attitudes among Mauritians and predicted that the constant threat of a major outbreak of racial violence would persist on the island for years to come. Given the empirical data available so few years after these countries achieved independence, pessimism certainly seemed justified. In post-colonial plural societies, ethnically inclusive nationalist movements fractured into intercommunal distributive conflicts once the state and economy came under local control ( Hintzen 1989, Rabushka and Shepsle 1974, Premdas 1995). Coupled with the enfranchisement of previously non-voting masses, which left opportunistic elites searching for ways to mobilize large constituencies efficiently, post-colonial politics possessed in abundance the ingredients for intense communal conflict. Independence produced changes in the rules of the game and reshaped norms and discourses, which in turn altered the incentives and institutions available to successive generations of political actors (North 1993, Rabushka and Shepsle 1974). In countries like Fiji, Trinidad, and Guyana, ethnic groups that had cooperated in nationalist coalitions frequently fragmented into ethnically based parties and factions (Rabushka and Shepsle 1974). Since ethnicity became both a

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salient cleavage and a politically convenient axis of mobilization at independence, subsequent democratic elections only intensified and exacerbated communal divisions. When ethnically mobilized voters went to the polls in newly independent plural societies, the competitive atmosphere served to reify and deepen the sense of what the Guyanese call apanjaht, which in Hindi means voting for your own kind (Rabushka and Shepsle 1974, Premdas 1995). The prospects for transcending ethnic parochialism with inclusive political institutions seemed as weak in Mauritius as they did in the similarly situated countries mentioned above. But while schism and fissure almost uniformly characterize politics in plural societies, Mauritius has managed to graft functional and robust national institutions onto an ethnically divided social substrate. Its ability to do so has permitted it to capture the positive effects of ethnic diversity while minimizing its costs. Although ethnicity constantly lurks beneath its politics, Mauritius has managed to avoid overt communalism and entrapment in what Lewis (1965) and Premdas (1995) call zero-sum ethno-political competition. With several multi-ethnic parties, peaceful transitions and contested elections, Mauritius has joined the ranks of consolidated democracies, whereas many countries, including similarly situated peers like Guyana and Fiji, have not (Brautigam 1997, Carroll and Carroll 1999). Understanding this divergence requires us to understand that post-colonial politics has two faces, which I call its deterministic and voluntaristic dimensions. Future development is path dependent because it is constrained by patterns established in the past. Decoding the political and economic trajectory of newly

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independent countries therefore requires attention to the historical inheritances, or social factor endowments, that determine the set of presently available choices. At the same time, decolonization was significant precisely because it devolved voluntaristic political control to local elites. The autonomous institutional choices made by newly independent elites are therefore important determinants of political and economic development. Because the politics of decolonization is both deterministic and voluntaristic, understanding institutional change requires attention to each of these dimensions. Both historical social factor endowments and deliberate institutional choices have permitted Mauritius to accommodate social pluralism with pragmatic strategies designed to secure public legitimation for the post-colonial regime. Social factor endowments include patterns of behavior inherited from colonial history, while voluntaristic decisions include the active institutional choices made by political actors in the post-colonial era. In Mauritius, endowments from colonial history gave the majority community both the resources and the incentives to support an ambitious nation-building project. Seeking economic development and democratic consolidation, the new political elite designed an elaborate system of inclusive institutions meant to secure the cooperation of minority communities through the use of integrative side payments in political, economic and cultural domains. Social Factor Endowments: Resources and Incentives for Development Though Mauritius clearly did not enter the era of independence with promising prospects for national integration and social peace, it was nonetheless

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endowed with a historical legacy that facilitated the development of socially integrative norms. Settlement patterns, a history of social cooperation, the advantages of late independence and the presence of a clear ethnic majority formed a comparatively advantageous social endowment relative to countries like Fiji and Guyana. These factor endowments provided the nation-building elite with both the resources and the incentives to pursue system-sustaining, nationally integrating policies. Initially, settlement patterns in Mauritius yielded ethnically integrated cities and rural communities. Spatial integration meant that individuals from different communities were drawn into inter-ethnic encounters on a regular basis; Bowman (1991) concludes that housing integration was an important factor limiting communal identification. By contrast, settlement patterns in Guyana tended to create ethnically homogeneous villages and communities. Voluntary segregation created conditions ripe for communalist appeals that stereotyped and demonized ethnic others (Premdas 1995). When mass politics developed in the post-colonial era, political parties ruthlessly exploited village homogeneity as a politically convenient means of carving Guyana into ethnic voting blocs (Premdas 1995). Spatial admixture of ethnic groups in Mauritius may have produced norms of accommodation that facilitated intercommunal harmony, whereas segregation in Guyana allowed the seeds of division to fester and grow. Residential integration is indicative of a broader type of social endowment that helped Mauritius overcome ethnic divides: a voluntary and cooperative civic culture. Though Mauritius does have a number of social organizations formed

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along explicitly sectional lines (see Chapter Two), it also has a colorful history of national cooperation. Following the publication of the Titmuss and Meade

Reports in the early 1960s, which heralded disaster unless Mauritius restrained its extremely rapid rate of population growth, several civil society organizations launched campaigns to lower fertility rates. Despite the extraordinarily sensitive nature of the issue, cross-communal civic organizations like Action Familiale and the Mauritius Family Planning Association helped cut population growth at a rate unequalled for any population of substantial size (Hein 1977). Members of all communities were able to encourage large numbers of individuals to change their sexual habits and even managed to convince the Catholic Church to relax its stance on discouraging reproductive restraint (Dommen and Dommen 1999). The birth control campaign is illustrative of a broader tradition of intense civic engagement that led Miles (1999) to describe Mauritius as a supercivil society. After all, though 20% of social organizations are ethnically based, 80% are not, and the aggregate number of organizations is higher than in many developing countries (Miles 1999). By contrast, Guyanese civil society is and always has been deeply fractured along ethnic lines (Despres 1975, Premdas 1995). Part of this polarization is undoubtedly related to the spatial segregation of communal groups, but it is also linked to the fact that political elites encouraged the development of clientelistic relationships between ethnic parties and co-ethnic civic associations. These relationships threw the parties into what appeared to be an irreversible spiral of ever increasing ethnic conflict and enhanced the political differences between Indians and Africans, reinforcing bifurcation in the

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Guyanese polity (Premdas 1995). In the vocabulary of the plural society model, Mauritius was less functionally differentiated along ethnic lines to begin with, and Mauritians had relatively more experience cooperating across ethnic lines to solve common problems. Two other institutional factors may have helped Mauritius avoid some of the grossest pathologies of pluralism: knowledge associated with late independence and certainty about the outcome of electoral contests. Mauritius became independent in 1968, near the tail end of British decolonization. Independence in Mauritius came after the emancipation of Malaysia, Guyana, and Trinidad, which gave Mauritians and their decolonizers the opportunity to learn from the successes and failures of post-colonial adaptation in other plural societies. Guyana, for example, became an anti-model of successful national integration; its experiences were highly instructive in that they showed other countries what not to do (Premdas 1995). Having seen outbreaks of violence in Guyana, the expulsion of Indians from East Africa and rumblings of ethnic tension in Fiji, Mauritian policymakers knew how much was at stake in the politics of accommodation (Bowman 1991). Late decolonization gave Mauritians time and perspective to devise more effective solutions. Finally, the existence of a clear ethnic majority may have created conditions favorable for growth. Mauritius is an example of what Rabushka and Shepsle (1974) call a plural society with a dominant majority, where one ethnic group clearly holds an electoral majority and can afford to pursue policies without the cooperation of minorities. While Rabushka and Shepsle argue that

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violence frequently erupts in this particular configuration of ethnic groups, they do not supplement this generalization with an account of how the majority groups incentives influence outcomes. It is entirely possible that a majority group, armed with the kind of comparative historical knowledge available to countries that gained independence relatively late, might instead recognize that a well-functioning system of electoral politics works to the majoritys advantage. A dominant majority benefits from system-sustaining policies that facilitate national integration and acceptance of a majoritarian regime. An ethnic group with a clear demographic majority, assured of continuous electoral and political dominance, would also pursue economically rational policies to maximize the rents that could be gained from long-term taxation of healthy enterprises (Olson 2000). Indeed, the existence of the ethnic compromise described in Chapter Two indicates that the majority community was indeed confident of its political dominance. By contrast, in countries characterized by a competitive configuration, two or more ethnic groups are equally likely to seize control of the state apparatus. In Guyana during the 1960s, for example, East Indians made up 47.8 percent of the population, while the Afro-Guyanese composed 44.8 percent (Government of Guyana 1974). Under conditions where demographic proportions are statistically similar, uncertain electoral outcomes create incentives for intense ethnic mobilization at every election (Rabushka and Shepsle 1972). For the losers, the closeness of the fight in a winner-take-all system detracts from regime legitimacy and encourages defection from the system. For the winners, the uncertainty of winning future elections might inspire heavyhanded state

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manipulation of electoral procedures and/or highly extractive, rent-seeking policies (Olson 2000). The foregoing analysis sheds some light on why Mauritius developed the way it did. Mauritius became independent under conditions that reflected a history of interethnic integration and cooperative behavior, which meant that some historical reserves of social capital were available for nation-building (Putnam 1993). Meanwhile, comparative historical knowledge and favorable demographics gave post-colonial elites from the majority community incentives to pursue ambitious projects of national integration and system stability. These endowments have undoubtedly contributed to democratic and economic consolidation in Mauritius, especially in light of the experience of countries like Guyana that shared few of these benefits. Institutional Design and the Accommodation of Ethnic Diversity Mauritius entered the independence era with certain advantages relative to other plural societies, but local control of politics and the economy certainly provided ample opportunities to exacerbate the fissures that remained. Fortunately for Mauritius, post-colonial leaders crafted new institutional arrangements that accommodated ethnic diversity through a series of working compromises. Facing incentives to create a stable, prosperous nation, the nation-building Hindu elite aimed to create institutions capable of eliciting cooperation both from its mass constituency and from minority communities. The institutional environment in independent Mauritius revolves around two seemingly contradictory but pragmatic propositions. Public institutions emphasize centripetal, integrative

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norms and attempt to obscure or equalize the particularistic impacts of public policies. At the same time, they acknowledge the existence of durable ethnic identities and encourage quasi- consociational arrangements to secure intercommunal acceptance. These institutional norms were projected into concrete policies that effectively channeled side payments to cooperating groups. These side payments took the form of integrative policies in the political, economic and cultural spheres. Political Accommodation Mauritian political institutions, both formal and informal, have attempted simultaneously to be ethnically neutral and ethnically representative. The debate over electoral rules underscores the important role of formal institutions in securing inter-ethnic political cooperation. In fully integrated societies, elections are performative expressions of faith and engagement in national institutions. Because a basic consensus exists on the nature of the political system, elections, though competitive, are also ritualistic affirmations of national solidarity. In ethnically polarized countries, however, electoral politics produce the opposite effects (Premdas 1995). Because ethnic control of the states coercive apparatus is at stake, elections in plural societies can expose the fault lines between communities and pit them in bitterly competitive zero-sum games. In Mauritius, the stakes were particularly high in the debate over electoral rules. Prior to independence, positions on the issue corresponded closely to ethnic affiliation. Members of the majority community naturally preferred singlemember constituencies elected by a first-past-the-post system, which will tend to

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magnify the political influence of an electoral majority (Mathur 1991). Minority communities preferred proportional representation (PR), which would guarantee them representation corresponding to their share of the population. In the end, the British colonial administration brokered a compromise prior to the 1967 elections that produced 3-member constituencies elected on a first-3-past-the-post algorithm. In addition, the electoral laws provided for the distribution of 8 bestloser seats to under-represented ethnic communities, guaranteeing parliamentary representation to all minority groups. Under this system, the ethnic breakdown of the elected legislature is calculated and compared to census data. Four candidates from communities that obtained a disproportionately small share of seats are appointed to the legislature. This heterodox approach, which combined majoritarian and consociational elements, created institutional incentives for inter-communal mass parties to emerge, since parties appealing only to small segments of the population would be unable to outmaneuver broad strategic alliances between different ethnic political groups. Indeed, the final construction of electoral rules was designed to force voters to choose between voting for three candidates based on party lines or communal lines; the intentional division of loyalties has helped Mauritius develop broadly inclusive multi-ethnic parties (Simmons 1982). Furthermore, the bestloser system, though frequently denounced as an objectionable formalization of obsolete communal cleavages, has served as the kind of basic guarantee of intercommunal representation that theorists believe will facilitate inter-communal cooperation (Movement Against Communalism 1995, Young 1994, Premdas

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1995). Indeed, complaints about an unnecessary best loser system are themselves evidence of good institutional engineering, as they demonstrate a belief in the successful de-communalization of politics. The integrative effects of the Mauritian electoral system become clearer in contrast to the disastrous consequences associated with proportional

representation in Guyana. Proportional representation tends to accentuate the divisions already existing in plural societies because groups do not need to compromise to secure parliamentary representation. Under systems of proportional representation, sizable ethnic groups can gain by focusing their efforts on mobilizing as many as possible of their supporters prior to elections, yielding intense ethnic politics, not coalition politics. In Guyana, where divisions were already severe, proportional representation welded ethnic loyalty to party identification as each group zealously exploited co-ethnic relationships to ensure maximal representation (Mathur 1991, Premdas 1995). The politics of apanjaht yielded election campaigns so saturated by ethnic hatred that election days routinely produced violence, intimidation and virtual civil war ( remdas 1995). P Though the electoral system certainly cannot bear all the blame for apanjaht, it exacerbated rather than mitigated extant ethnic political divisions. Political accommodation has also been important in the informal negotiation of consequential decisions. Mauritian economic policymaking, for example, is notable for its dependence on highly consultative and inclusive procedures. The state involves itself extensively in economic affairs and uses its influence to elicit participation from the affected interest groups, including

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sectoral and ethnic organizations (Wellisz and Lam Shin Saw 1993, Brautigam 1997). Regular interaction between the private and the public sectors occurs formally at the level of the Joint Economic Council, which brings together representatives from the tightly organized Mauritian private sector (Jhumka interview, Summer 2001). Private sector representatives note that they have been pleasantly surprised by the pragmatism and cooperative attitude of government policymakers. In some respects, inclusive informal negotiations between private and public sector leaders are a type of consociational arrangement intended to broker elite compromises (Lijphart 1977). As one corporate executive stated: Mauritius is so small that the private sector and public sector leaders all know each other. They have cocktails together, exchange ideas, work together at the JEC. Each knows what the other is thinking, and that helps good policy develop (Interview in Mauritius, Summer 2001). Though this arrangement seems susceptible to Barrys (1975) critique that consociational arrangements produce unresponsive elite cartels, the Mauritian government often engages broader segments of the population in consultations, including mandatory annual tripartite negotiations responsible for establishing industry-wide minimum wages (N. Nababsing interview, Summer 2001). The government does not hesitate to involve non-governmental organizations and other representatives of civil society in informal consultations, which ultimately serve an important legitimating function by providing broad access to policymaking. Though many of these negotiations involve civil society in the context of sectoral rather than sectional engagement, the perceived

correspondence between ethnicity and economic position renders these distinctions politically interchangeable.

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Ultimately, a stable majoritarian system provides clear benefits for members of an ethnic majority, but political stability requires practices of accommodation that guarantee baseline levels of participation and input from all communities. The careful construction of formally inclusive and informally consociational institutional arrangements has given the Hindu-dominated Mauritian government symbolic legitimacy and the stability important to political and economic development. Economic Accommodation In the Vision 2020 economic development strategy report, the Mauritian government described the basic philosophy behind its social policy: We have achieved economic success partly because of the strength of our welfare system. For it is the free education, social security and health and welfare services which have given us the high education levels, high health standards and, above all, the exceptional social cohesion which have underpinned our past economic development (MEDRC 1997). In a highly divided, plural society, politics can quickly become bitterly divisive. When ethnic groups are highly mobilized and polarized, the battle for control of the state takes on both symbolic and material importance, since ethnically intense politics turn into a winner-take-all game where one ethnic coalition will appropriate the coercive apparatus of the state. The Mauritian government has managed to lower the stakes of ethnic competition by creating a universal economic baseline guaranteed to all Mauritians on the basis of citizenship, not ethnicity. Like the best-loser system, which creates a symbolically important lower bound of representation, the welfare state guarantees members of all ethnic groups a basic standard of living, lowering the stakes of inter-ethnic political

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competition (Brautigam 1997). The welfare state and the inclusive norms it embodies have been a powerfully integrative force for encouraging national loyalty, a fact enshrined in the name of the Ministry of Social Security and National Solidarity, which oversees social welfare programs in Mauritius. The Mauritian welfare state provides several types of social safety nets that make national development personally relevant. A National Pension Fund provides universal non-contributory benefits, additional contributory benefits, and compensation for injured workers (Government of Mauritius 1998). A National Savings Fund provides financial resources for retirees, and a means-tested Social Aid scheme provides food subsidies, certain kinds of health care, and housing assistance. While many benefits provided under the welfare state are meanstested, a substantial number of social programs provide benefits to all Mauritians on the basis of citizenship. Some observers have argued that better targeting is necessary to reach truly needy groups (Mauritius Research Council 1999). Indeed, the universal welfare state may not be the most efficient model for a state with extremely limited resources. At the same time, the symbolic value of a universal system cannot be underestimated in a society composed of segments obsessively focused upon their share in the national pie. The Mauritian welfare state is part of an attempt to minimize distributional conflicts between deeply divided social groups, and it has undoubtedly contributed to improvements in income equality and public health indicators. More bluntly, the welfare state can be seen as a massive

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structural side payment to minority and/or disenfranchised groups for cooperating with the nation-building project. Furthermore, the Mauritian welfare state has redistributed the gains from development without coercively redistributing the islands productive assets. The government has allowed the Franco-Mauritian minority to retain control of the private sector, and has taxed its economic activities to build a broadly inclusive welfare system. Whereas nationalizations and destructively extractive policies have tainted public-private relations in ethnically heterogeneous states like Ghana, Fiji and Guyana (Easterly 2001a, Carroll 1994, Premdas 1995). Mauritian elites have established secure private property rights, negotiated favorable trading conditions, and steadily taxed and redistributed economic gains to all Mauritians. This pragmatic and moderate social compromise has helped build national cohesion (MEDRC 1997). The norms of accommodation and universal distribution are also apparent in the Export Processing Zone (EPZ) Act of 1970. Unlike many developing countries, which used export processing zones to aggregate scarce capital and infrastructure in a single, geographically restricted enclave, the Mauritian EPZ extended benefits to export processing firms that could be located anywhere in the island (Woldekidan 1994). Even though no area of Mauritius is ethnically homogeneous, ethnic ratios differ between regions. The dispersion of the EPZ meant that employment could be generated all over the island, neatly obviating the inevitably politicized choice of a single geographic location.

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In general, Mauritian industrial policy has attempted to create economic opportunities that are not specific to ethnic groups. One government minister I interviewed noted that the current attempt to build a cyber-island around information and computer technologies was partially motivated by a desire to erode the ethnic division of labor in Mauritius, since these intensively skill-based industries will provide less room for ethnic discrimination (Interview in Mauritius, Summer 2001). Economic and social policies have extensively employed universal incentives and transfer payments designed to build consensus around the countrys basic development model. By sharing the benefits of national development with members from all ethnic communities, these integrative practices have contributed to national integration. Cultural Accommodation Because ethnic identification is closely related to the propagation and communication of symbolic differences, cultural policy is an important dimension of the institutional management of ethnic diversity. Three possible cultural strategies exist for the government of a plural society. A government can promote a biased cultural agenda by emphasizing one cultural tradition (normally its own) above other traditions. Alternatively, it can adopt a negative cultural agenda by refusing to endorse any cultural tradition. Finally, the state can promulgate a positive cultural agenda by according equal promotional treatment to all cultural traditions. While the first stance tends to intensify conflict by demonstrating ethnic favoritism, either of the latter two qualifies as an accommodative equilibrium. The negative position, representative of the American model, treats

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cultures equally by relegating cultural differences to the private sphere. In Mauritius, however, the state is perceived to over-represent one ethnic community, so such a stance would be interpreted as a substantive bias in favor of Indo-Mauritian culture. Instead, Mauritius has managed to accommodate diversity through a heterodox approach. In arenas where state resources are involved, the government has embraced positive institutional norms supportive of all communities. In private arenas, the state has encouraged the elimination of communal identification. Cultural policy in Mauritius, then, selectively switches between positive and negative cultural agendas. This approach acknowledges the value of cultural resources without involving the state in an ethnically biased political agenda. The most obvious area of positive agenda-setting is the government subsidy to religious organizations in Mauritius. Religious groups receive a perhead subsidy to fund their activities, and they also qualify for certain exemptions from taxes and tariffs on utility usage. Religions are also an important source of national holidays; at independence, Mauritius held the world record for national holidays (32 each year) because each religious sect wanted its sacred dates to be enshrined as a public event (Dommen and Dommen 1999). Though Prime Minister Ramgoolam eventually reduced the number of holidays to 10 each year, 70% of the remaining celebrations are sectarian in nature. Table 4.1 lists the holidays that remain:

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Table 4.1: National Holidays in Mauritius

New Year (2 days) Id-El- Fitr Chinese Spring Festival Labour Day Thaiposam Cavadee Ganesh Chaturti

Maha Shivratree All Saints Day National Day Divali Ougadi Christmas

Source: Dommen and Dommen 1999

Close examination reveals that even drastic reductions in the number of officially sanctioned holidays left each of the islands major ethnic groups represented on the public calendar. Compromises like this one are indicative of the Mauritian governments pragmatism and sensitivity to the distributive implications of cultural policies. The positive approach to cultural policy, however, can be expensive. It is cheaper and easier to avoid cultural involvement than it is to furnish public support to every extant cultural tradition. Where possible, the Mauritian government has attempted to avoid entanglement in politically sensitive cultural issues. For example, the government has, with notable exceptions, avoided the controversial issue of language. Mauritius has no official language because each language is associated with an ethnic group, and official adoption of one would provoke intense communal agitation. French is the language of the historically dominant Franco-Mauritian community; Bhojpuri is the language of the Hindu majority; Arabic and Urdu correspond to the Muslim community, and the SinoMauritian community speaks various Chinese dialects. English is the language most often used by government precisely because it is foreign and ostensibly neutral (Miles 2000). Though English is distastefully linked to colonial

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oppression, it has two key advantages from a political perspective. The English language is useful in international transactions, and it symbolically unites communities in the common memory of nationalist mobilization (Eriksen 1998). The Mauritian government has even attempted to reduce the salience of ethnic divisions in the private sphere. Until the late 1970s, sports teams in Mauritius were organized along communal lines. Teams with names like the Hindu Cadets attracted support from co-ethnic fanatics, and football matches became mimetic contests between communal segments of the population. An editorial in Le Mauricien warned that conflicts in the microcosm of sports could fan the flames of communalism in the society at large: We have very often seen the degree of communal tension generated during a football match between two communal teams. One of these days, the tension may degenerate into communal fighting, the consequences of which would doubtlessly be very grave (10 July 1979). Recognizing these dangers, the Ministry of Youth and Sports decommunalized team sports, noting that: There was a time where you could say by the name of a Mauritian he was the fan of which team. People used to associate the prestige of a community to that of a football team. It was through dialogue that we brought this decommunalization, and to-day in the sports federations, any team bearing a communal name is not allowed to become a member (Sessional Papers, 1984). By intervening to remove ethnic affiliations from the realm of private athletic competition, the Mauritian government demonstrated a normative commitment to the elimination of organized inter-communal competition. Indeed, successive governments have initiated innovative campaigns designed to encourage intercommunal harmony in citizens private lives, including a National Courtesy

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Campaign that distributed anti- communalist pamphlets and literature at major hypermarkets and public spaces around the island (MACOSS 2000). Regime legitimacy depends crucially on the states ability to appear nonpartisan, so pursuing neutral policy equilibria and adopting anti- communalist rhetoric are strategies central to the management of cultural diversity. Because it is demographically associated with the Hindu majority, the Mauritian government has to adopt certain positive cultural policies to demonstrate a commitment to equal treatment. When it can, however, the government avoids addressing cultural affairs, except when it intervenes to make inclusive statements about building national community and resisting communalism. This idiosyncratic combination of intervention and disengagement has contributed to inter-ethnic cooperation and the political legitimacy of the Mauritian state. The Construction of the Rainbow Society Though the referendum on independence ethnically mobilized the Mauritian population, the victorious nation-building elite had powerful incentives and resources to build a stable society. The political, economic and cultural policies developed in the post-colonial era built a cooperative institutional environment that attempted to reconcile the project of the nation-state with the existence of durable sub-national ethnic identities. The institutional arrangements described above form what World Bank observers called the typical Mauritian compromise: a socially acceptable and economically satisfactory, although not an optimal, solution (Wellisz and Lam Shin Saw 1993). Indeed, it is the

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institutionalization of compromise that has greatly facilitated the inscription of national identities upon ethnic bodies. Commitment to a stable national polity has not eliminated ethnicity in Mauritius, but it has successfully re-framed the institutional matrix of incentives that guide intersubjective encounters. If ethnic identification and inter-group competition are responsible for the perverse economic effects of ethnic diversity, strategies that reduce the salience of exclusive identities can help plural societies manage social conflict. Integrative social bargains have modified the institutional context for inter-ethnic interactions in Mauritius, and they are largely responsible for preventing the pathologies traditionally associated with strong sub-national ethnic identification. Ethnic diversity persists in Mauritius, but the rainbow society is blending at the edges, not tearing at the seams.

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