Working Paper: NBER ID: w18275
Authors: Stelios Michalopoulos; Elias Papaioannou
Abstract: We investigate the role of national institutions on subnational African development in a novel framework that accounts both for local geography and cultural-genetic traits. We exploit the fact that the political boundaries in the eve of African independence partitioned more than two hundred ethnic groups across adjacent countries subjecting similar cultures, residing in homogeneous geographic areas, to different formal institutions. Using both a matching-type and a spatial 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 images of light density. The average non-effect of national institutions on ethnic development masks considerable heterogeneity partially driven by the diminishing role of national institutions in areas further from the capital cities.
Keywords: National Institutions; Subnational Development; Africa; Cultural Traits; Economic Performance
JEL Codes: N17; O10; O4; O43; Z10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| National institutions (D02) | Economic performance (P17) |
| National institutions (D02) | Economic performance (partitioned ethnic groups) (P27) |
| Distance from capital cities (R12) | Impact of national institutions on regional development (O43) |
| National institutions (D02) | Subnational development (O29) |
| Geographic and ethnic differences (J15) | Relationship between national institutions and development (O43) |