Why do some leaders deliberately foster ethnic hatred and exclusion even though such a policy increases the risk of ethnic conflict? Contrary to common belief, I find that ethnic exclusion is good politics (but not good policy) for non-democratic leaders with small winning coalitions, despite its positive impact on the risk of ethnic conflict. To explain this mechanism, I modify the selectorate theory of Bueno de Mesquita, et al. (2003) by explicitly accounting for the role of ethnic ties in the formation of the incumbent's coalition. Four hypotheses are deduced from my theory for explaining ethnic exclusion and leader survival. H1 maintains that, in small-coalition systems, leaders who employ ethnic exclusion are more likely to survive longer in office than those who do not employ it. H2 predicts that, if small-coalition leaders do not pursue an exclusive ethnic policy, they are more likely to be removed from office in an irregular manner. H3 suggests that small-coalition leaders are less likely to lose power during civil war if they employ ethnic exclusion. Lastly, if ethnic exclusion really is good politics for small-coalition leaders, H4 predicts, there should be higher levels of ethnic exclusion in small-coalition systems than in large-coalition systems. These hypotheses are empirically tested and supported by Cox's proportional hazard regressions using data on the tenures of 982 leaders from 1946 to 2004. My results show that in small-coalition systems: (1) the hazard of deposition for leaders who implement a strong exclusion policy is about 80% lower than that of leaders who do not promote ethnic exclusion; (2) the risk of irregular turnover among leaders who employ ethnic exclusion is only about 1.3% of the risk for those who do not employ such a policy; and (3) the risk of irregular removal from office virtually disappears even in times of civil war if a leader employs a strong exclusion policy. Case studies of Iraq, Burundi, and Rwanda further corroborate causal claims made by the exclusion theory. In all three cases, major ethnic groups had been excluded from participation in the incumbent's coalition until a small group of ethnic elites monopolizes key positions in the army and government. The cases of Burundi and Rwanda further demonstrate how small-coalition systems face large-scale violence when inclusive ethnic policy is implemented after years of exclusive rule. Overall, my findings lead to an "unwelcome" conclusion: ethnic exclusion is good politics in small-coalition systems even if it could increase the risk of ethnic conflict. This conclusion suggests that the crucial element in the prevention and resolution of ethnic conflict is the development of policies that can address leaders' incentives for ethnic exclusion.
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