Using a unique dataset collected in 59 rural Gambian villages, we study how
ethnic heterogeneity is related to the structure of four economic exchange networks:
land, labor, inputs and credit. We find that different measures of village-level ethnic
fragmentation are mostly uncorrelated with network structure. At a more disaggregated
level, household heads belonging to ethnic minorities are not less central
than those from the predominant ethnicity in any of the networks and, at the dyadic
level, the fact that two households share ethnicity is not an economically significant
predictor of link formation. Our results indicate that, in the particular setting of
our study, the structure of the exchange networks is better defined by other variables
than ethnicity, and that ethnic heterogeneity is unlikely to be a driver for
sub-optimal economic exchanges. We argue that our findings can be interpreted
in a causal way as the current distribution of ethnic groups in rural Gambia is
largely influenced by specific historical features of the British colonial administration.
Moreover, the network structure of our data allow us to include fixed effects at
different levels as well as to precisely measure kinship ties, a confounding variable
often omitted in previous studies.