National Institutions and African Development: Evidence from Partitioned Ethnicities

63 Pages Posted: 28 Sep 2012

See all articles by Stelios Michalopoulos

Stelios Michalopoulos

Brown University - Department of Economics; Brown University

Elias Papaioannou

London Business School; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: August 2012

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

JEL Classification: N17, O10, O40, O43, Z10

Suggested Citation

Michalopoulos, Stelios and Papaioannou, Elias, National Institutions and African Development: Evidence from Partitioned Ethnicities (August 2012). CEPR Discussion Paper No. DP9075, Available at SSRN: https://ssrn.com/abstract=2153525

Stelios Michalopoulos (Contact Author)

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

HOME PAGE: http://https://sites.google.com/site/steliosecon/

Brown University ( email )

Box 1860
Providence, RI 02912
United States

Elias Papaioannou

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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