Cultural Diversity and National Performance Nikolaos Hlepas nhlepas@gmail.com Abstract This paper focuses on impacts of cultural diversity and ethnic fractionalization on different aspects of national performance. Under the circumstances of Europeanization and Globalization, cultural and ethnic diversity is expected to further increase both in the EU and in the ENPI countries. Based on empirical surveys that were mostly conducted outside the European contexts, a big part of theory argues that diversity has negative impacts on social cohesion and quality of governance, on economic performance and human development, in other words that diversity is bad for national performance. A first aim of this paper is to test whether the assumption about negative impacts of diversity does apply in most of the EU and the ENPI countries. For this reason, diversity is being defined, measured and compared across several countries and then put side by side with national performance in governance, global competitiveness and human development, as well with the level of generalized trust in each country. Subsequently, it is investigated, among EU and ENPI countries, whether acceptance of diversity is significantly stronger in some of them. Furthermore, institutional and cultural features of EU countries that were found to be more open to diversity while also reaching good scores of national performance are selected and systematized, following actor-centered institutionalism. The final aim of this paper is to draw lessons about institutions and policies that promote incorporation of diversity as a dynamic element of Europeanization and an addressee of ENPI policies. Keywords Accepting diversity, citizenship regimes, culture, diversity, ethnic diversity, ethnic fractionalization, generalized trust, global competitiveness, human development, inequality, institutional performance, minorities, political culture, rational values, self-expression values, state tradition, welfare state models Paper submitted to the SEARCH Project (Sharing KnowledgE Assets: InteRregionally Cohesive NeigHborhoods, FP7, www.ub.edu/searchproject)