What’s good (and bad) about greater diversity?

High-level city objectives in The Grattan Institute's 'The cities we need'

A standard objective these days in high-level city strategic plans is greater diversity. It’s mentioned, for example, in Melbourne 2030, in the Committee for Melbourne’s Beyond 5 Million and in The Grattan Institute’s The Cities We Need (see graphic).

The Grattan Institute says diversity is important because “many economists think that mixing of ethnicity, age, culture and education is important for a modern knowledge economy, in order to stimulate and disperse ideas”.

But according to Dr Andrew Leigh, it’s not necessarily all mother’s milk, at least in relation to ethnic diversity (which is what most discussion of diversity in Australia is about). In his new book on social capital, Disconnected (which I’ve discussed before), he points out that there is a negative correlation between trust and ethnic diversity:

Residents of multi-racial neighbourhoods are more likely to agree that ‘you can’t be too careful in dealing with most Australians’. In particular, neighbourhoods where many languages are spoken tend have lower levels of trust…

This accords with the findings of a succession of studies of ethnic diversity in the US and other countries. We will have to work harder, Dr Leigh suggests, if we are to make Australia both diverse and high trust.

Let me emphasise that Dr Leigh, who is the new ALP member for Fraser in the ACT and until the last election was a Professor of economics at ANU, is a supporter of immigration:

A spate of studies suggest that continued high levels of immigration will most likely bring a raft of economic and social benefits to Australia. But we should not gild the lily. Most likely, higher diversity will lead to lower levels of interpersonal trust…..the challenge for policymakers is how to maintain the current levels of  immigration while mitigating the impact on our social and political fabric.

But how do you mitigate that impact? Most city policy documents don’t even acknowledge that there might be potential downsides to ethnic diversity. Nor do they usually specify what the spatial dimension is, much less what specific policies ought to be pursued.

To its credit, The Grattan Institute recognises the probable damage to social capital in the short to medium term from greater ethnic diversity. But when it comes to policy, the Institute hasn’t got much to say. It simply says that our cities should “not have ‘ghettos’, not just because they are barriers to social mobility, but also because they are bad for the modern economy”. Just how ‘ghettos’ might be discouraged isn’t canvassed.

‘Ghetto’ is a pejorative term – one definition is a “poor, densely populated city district occupied by a minority group linked together by economic hardship and social restrictions”.

I don’t think the European migrants who concentrated in the inner cities of Melbourne, Sydney and Brisbane after the war saw themselves as living in a ‘ghetto’ or as part of a ‘disadvantaged’ group. Nor do I think the large number of Asian-born residents living in (say) Box Hill in Melbourne see themselves as living in a ‘ghetto’.

Rather, I expect migrants see themselves as making a rational choice. There are considerable advantages for migrants in settling among people of their own ethnic background. It gives access to rich information networks about jobs, potential marriage partners, access to housing finance and the myriad other essentials for adapting to life in a new country.

The grown-up children of migrants tend to be more geographically mobile than their parents, but for the first wave of settlers the benefit of having family and a community close by who speak the same language, practise the same religion and live by familiar cultural norms must be immense. In short, areas of ethnic concentration are often rich in social capital and positive externalities.

For example, I’d hypothesise that the high proportion of Asian and subcontinent students at Victoria’s two major selective schools, Melbourne High and Mac.Robertson High, is due more to rich information networks within these communities than it is to the so-called ‘Tiger Mother’ effect.

I think we need to take a more nuanced view of how ethnic diversity works in spatial terms. For example, it might be that diversity is most important at the metropolitan scale and that the benefits of ethnic concentration at the suburban or sub regional level far outweigh any downsides. And the benefits of diversity for particular households probably vary over time and with succeeding generations.

That still leaves potential for tension between the long-established residents of a suburb and recent settlers from overseas. Some existing residents will welcome the change because of the increase in the number and variety of opportunities it brings, but some will resent it. If the newcomers are also of a different socioeconomic class, that resentment might be greater.

Now that we’ve abandoned building very large social housing estates, I doubt that increasing trust within an ethnically diverse suburb or neighbourhood has a lot to do with urban policy or planning. It’s not that simple. I think it’s got much more to do with actions to discourage discrimination and encourage tolerance. That’s much harder.

We need to think more deeply about what high level objectives we assume for our cities and, in particular, how they translate into policy and practice. We need to think about the implications, both positive and negative.