National Institutions and African Development: Evidence from Partitioned Ethnicities

Elias Papaioannou and Stelios Michalopoulos

No 9075, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We investigate the role of national institutions on regional development in a novel framework. We exploit the fact that the arbitrary political boundaries in the eve of African independence partitioned more than two hundred ethnic groups across different countries subjecting similar cultures, residing in homogeneous geographic areas, to different formal institutions. Using both a matching-type and a regression discontinuity approach we show that differences in countrywide institutional structures across the national border do not explain within-ethnicity differences in economic performance, as captured by satellite light density at night. Despite some evidence of heterogeneity, for the overwhelming majority of groups the relationship is economically and statistically insignificant. While our results do not necessarily generalize to areas far from the national borders, close to the capital cities or to other parts of the world, they suggest that the cross-country positive correlation between formal national institutions and economic development has to be carefully interpreted.

Keywords: Africa; Borders; Development; Ethnicity; Institutions; Regression discontinuity (search for similar items in EconPapers)
JEL-codes: N17 O10 O40 O43 Z10 (search for similar items in EconPapers)
Date: 2012-08
New Economics Papers: this item is included in nep-afr
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Citations: View citations in EconPapers (13)

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