How does diversity affect the tendency for individuals to think and act in a fair, ethical, and pro-social fashion? Unfortunately for multiculturalists, a significant amount of evidence links ethnic heterogeneity to negative outcomes in areas such as economic growth, public goods provision, and conflict (e.g. Alesina and Le Ferrara 2003). However, there is also evidence from laboratory studies that homogeneous groups have their own problems. When placed in groups, for example, similar-minded individuals may become more extreme in their views, a phenomenon known as “risky shift” (Myers and Biship 1970). In addition, due to the “similarity-leniency” effect, people may be more lenient when evaluating members of their in-group, perverting the course of justice (Kerr et al 1995). In the Middle East, these issues are especially important because of the salience of group identity. Although a growing literature addresses the effects of heterogeneity on social preferences and altruism more generally, there is less work on how heterogeneity might affect attitudes related to corruption; the acceptability of “connections” as a means of social mobility (i.e., wasta) over demonstrated performance or merit; and the propensity to lie and cheat. At the same time, experimental findings provide good foundations for the hypothesis that heterogeneity—by reducing in-group bias, fostering tolerance, and creating the sense of being judged by others—may encourage more ethical behavior. This paper contributes by examining the effects of heterogeneity on ethical attitudes and behaviors in a sample of Middle Eastern youth. Emirati high school students in the United Arab Emirates were randomly assigned to a homogeneous or a heterogeneous group. Homogeneous groups consisted only of Emirati youth. Heterogeneous groups included both Emirati and expatriate Arab youth. After a group identity-building exercise, a range of ethical attitudes and behaviors relating to corruption, broadly understood, were measured, including cheating propensity via a fake test and leniency toward in-group ethical transgressors. Results should contribute to knowledge about the effects, both negative and positive, of heterogeneity on society, with emphasis on how those effects unfold in the highly diverse Arab world. Bibliography Alesina, A. and E. La Ferrara. 2005. “Ethnic Diversity and Economic Performance.” Journal of Economic Literature 43: 762-800. Kerr, N. L., Hymes, R. W., Anderson, A. B., & Weathers, J. E. 1995. “Defendant-juror Similarity and Mock Juror Judgments.” Law and Human Behavior 19: 545-568. Myers, D. G., & Bishop, G. D. 1970. “Discussion Effects on Racial Attitudes.” Science, 169: 778-779.