Did the Cold War Produce Development Clusters in Africa?

Shlomo Weber, Paul Castaneda Dower, Gunes Gokmen and Michel Le Breton

No 15810, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper examines the lasting impact of the alignment of African countries during the Cold War on modern economic development. We show that the division of the continent into two blocs (East/West) led to two clusters of development outcomes that reflect the Cold War’s ideological divide. To determine alignment, we introduce a non-cooperative game of social interactions between African countries, where every country chooses one of two existing blocs based on its predetermined bilateral similarities with other members of the bloc. We show the existence of a strong Nash equilibrium in our game and apply the celebrated MaxCut method to identify such a partition. We validate the alignment by confirming that it predicts UN General Assembly voting patterns during the Cold War. Our approach, linking global political interdependence to distinct development paths in Africa, extracts from history a micro-founded, exogenous treatment, while allowing for an endogenous, process-oriented view of historical events.

Keywords: Cold war; Political alliances; Africa; Blocs; Development clusters; Strong nash equilibrium; Landscape theory (search for similar items in EconPapers)
JEL-codes: C62 C72 F54 F55 N47 O19 O57 Y10 (search for similar items in EconPapers)
Date: 2021-02
New Economics Papers: this item is included in nep-gro, nep-gth and nep-his
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