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Did the Cold War Produce Development Clusters in Africa?

Paul Castaneda Dower (), Gunes Gokmen, Michel Le Breton () and Shlomo Weber ()
Additional contact information
Paul Castaneda Dower: University of Wisconsin-Madison
Michel Le Breton: Toulouse School of Economics
Shlomo Weber: New Economic School, Moscow

No 2021:10, Working Papers from Lund University, Department of Economics

Abstract: This paper examines the lasting impact of the alignment of African countries during the Cold War on their modern economic development. We find 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 where each country chooses one of the 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. The alignment predicts UN General Assembly voting patterns during the Cold War but not after. Our approach, linking global political interdependence to distinct development paths in Africa, relies on history to extract a micro-founded treatment assignment, 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)
Pages: 72 pages
Date: 2021-06-22
New Economics Papers: this item is included in nep-afr, nep-dev and nep-his
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Working Paper: Did the Cold War Produce Development Clusters in Africa? (2022) Downloads
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