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The
Economic Costs of Discrimination
The Economic
Cost of Roma Discrimination in Bulgaria
Background
and objective
During
the forty years of communist regime in Bulgaria the government
implemented a number of housing, education, and social policies, aiming
to "integrate" the Roma minority. These ill-advised policies had little
or a negative effects. Since 1989 successive governments in Bulgaria
have done close to nothing on improving the livelihoods of the Roma.
The adoption, in 1999 of a Framework Program for Equal Integration of
the Roma in Bulgarian Society has not resulted on concrete policies.
While the economic and social costs that the Roma minority has paid are
quite obvious and have attracted lots of research and attention, none
has really addressed the issue of the
price that the Bulgaria's taxpayers have paid for theirs government's
inaction. . Racial discrimination and government inaction have come at
a terrible economic cost to Bulgaria's taxpayers. Unemployed and
undereducated Roma end up more often in prison, on social assistance,
repeating school grades, using emergency services, etc. The objective
of this project is
to estimate how much has the government overspent in the judicial and
law-enforcement system, as well as on education, healthcare, and
welfare benefits (unemployment, social
assistance, and child-support).
Existing
research
Most
studies on the economics of discrimination have focused on
providing a theoretical economic explanation of the discrimination. The
only relevant model is the Ethnic Cartel model that suggests that
economic gain is the main motive for discrimination, with the benefit
achieved through collective action by economically dominant ethnic
group, e.g.
Whites
in the US. Lester Thurow (1969), who argues that Whites gain
from discrimination, fails to provide any evidence, and rather assumes
these
gains.
There
is a whole other body of literature that has focused on estimating the
costs that minority groups or their individuals bare as a result of the
discrimination. For example, the World Bank commissioned in 1994 an
extensive study of the economic costs that indigenous people in South
America have paid for being discriminated. Another body of literature
has focused on estimating the costs that employers pay for
discriminating. Staff who believe or perceive they are being harassed
or discriminated against in the workplace become dissatisfied and
unhappy, which may ultimately lead to resignations. Costs associated
with such scenarios include: recruitment
costs, training costs, performance "catch-up" costs, legal costs
associated with complaints and claims, etc.
The
most relevant analogical studies on the costs of discrimination have
been done on the economic costs of gender discrimination. The UN State
of World Population Report 2000, for example estimates that the a 1
percent increase in female secondary schooling results in a 0.3 percent
increase in economic growth.
Project
activity and plan
The
main goal of the project will be to produce a policy / advocacy paper
that clearly demonstrates to the government that it is much cheaper not
to discriminate and instead to invest in programs for improving the
livelihoods of the Roma and Turkish minorities. The project will
consist of four sub-studies in the areas of judiciary and
law-enforcement, education, healthcare, and welfare assistance. Each
study will examine the government spending in the year preceding the
fellowship, i.e. 2003. Each study will also rest on the following
assumption. If the government has spent on healthcare on average $350
per year per Roma person and only $200 per Bulgarian person, then, I
will consider the additional amount to be a cost of discrimination. Of
course, this example is an oversimplification but this will be the
general principle.
In
the area of judiciary and law-enforcement, the project will undertake a
general study to find what is the population of Roma and Turkish
descent in Bulgarian prisons, and what are the costs associated with
it. The study will also look at law-enforcement initiatives, going
above and beyond the ordinary, specifically aimed at minority
neighborhoods, where criminality and certain crimes are
overrepresented. The working presumption in
this
sub-study is that high unemployment and lack of perspectives force
Roma into petty crime and the grey economy. Thus, they are
disproportionately represented in correctional institutions.
In
the area of education, the project will look closer at education
programs and will estimate the number of repeats, efforts to bring back
drop-outs, enrollment practices. The working presumption here, is that
the lack of adequate education programs, force many Roma to repeat
grades. The disproportionately high number of drop-outs forces schools
and teachers to use a number of different methods, by visiting houses,
or having additional teacher-parents meetings, etc. Most of all, the
project will
look at the overuse of special-care institutions, where many Roma end
up, presumed to be mentally retarded.
In
healthcare, the study will focus on the disproportionate use of Roma
of certain healthcare services, especially emergency services. The lack
of health culture, family planning, and infrastructure, leads many Roma
to use healthcare only as
a last resort, thus relying on the more expensive emergency services.
The lack of adequate sanitation and health culture is also a reason why
many Roma often contract a number of diseases,
including
skin diseases, diarrhea, TB, etc. Inadequate nutrition is
also a great contributor to higher rates of TB. The ripple effects of
the Roma's lower health status has a number of other effects in terms
of lost wages, greater reliance on social assistance, etc.
In
regards to the government costs in welfare assistance, the study will
explore the disproportionate spending of the government of unemployment
benefits, social assistance, and child-support. Here the working
presumptions are several. Unemployment rates among Roma are much
higher, so the their use of unemployment benefits and social assistance
(such as energy support) is disproportionate (this is not necessarily
always true). In the area of child-support, the working presumption is
that the lack of adequate family planning programs and services leads
to many unplanned or unwanted pregnancies. This results in higher use
of expensive abortions, high use of child-support, and use or children
being sent to institutions.
Methodology
To
each of the above four areas will be devoted two to three months. The
study will be concentrated in the regions and or municipalities with
greater concentration of Roma. I will rely on interviews as well as on
internal reports of the relevant regional representatives of
ministries, and local branches of the National Statistical Institute,
and municipal authorities. Once the interview / field part of the study
has
been finalized an analysis of the data gathered will be conducted. If
the funding allows,
or if the Center for the Study of Democracy agrees to, I could use the
help of research assistants in analyzing the data. Since I will not be
able to visit and interview every single locality with minority
population, a statistical analysis and inference will be conducted
based on the existing data.
Project effects
If
the project demonstrates the enormous cost of discrimination, there
will be several effects. First, the relevant policy makers will be more
likely to approve and advocate spending on minority development
programs. Many of the top-level policy
makers, with whom the Center for the Study of Democracy closely works,
have been educated in Western institutions, and value above all
cost-efficiency in government
spending. Second,
minority members of Parliament will be able to use the study as
an argument to encourage and approve budgetary provisions for minority
development programs.
Finally,
advocacy NGOs in Bulgaria will be given a powerful tool to
push for new policies. The proposed project could also be used beyond
Bulgaria. Most
likely a similar study in other Eastern European countries will have
the same results. The study could serve as an advocacy tool by other
bodies, especially the European Union. The EU accession process is the
most efficient way to urge change in government policies towards
minorities. The study could also benefit advocacy organizations
around the
world
that work against racism.
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