We explore the role of language policy choices as a source of growth and development
of nation states. First in a cross-country framework we document that choosing
as official a language that is distant from the ones spoken by the local population
is negatively correlated with the level of income per capita. This effect is economically
meaningful and robust to a wide variety of controls such as institutional quality,
geography, ethno-linguistic fractionalization and natural resources. To help interpret
the cross-country results, we identify theoretically two channels: (a) the individual’s
exposure to and (b) the individual’s mother tongue’s distance from the official language.
Next, using individual level data from a set of twelve African countries and
India, we provide empirical support on how these two channels affect human capital
and occupational outcomes. Finally, we present narrative evidence on why, given the
welfare implications of language policy, post-colonial elites have sustained inefficient
policies. The theoretical and empirical evidence presented suggest the need for further
exploration of the role of language in economic development.