Revisiting the Economic Performance and Institutions Debate in SSA Countries: The Role of Legal Origins in the Context of Ethnic Heterogeneity

34 Pages Posted: 19 Mar 2021

See all articles by Ioannis Bournakis

Ioannis Bournakis

Middlesex University; American University in Cairo

Marian Rizov

University of Lincoln (UK) - Lincoln International Business School; Lincoln Economics and Finance (LEAF) Research Group

Dimitris Christopoulos

Athens University of Economics and Business

Date Written: March 10, 2021

Abstract

We contribute to the literature of economic performance and institutions by analysing how the interplay between historical legal roots and ethnic heterogeneity can determine current economic outcomes estimating various specifications of the national production function. Our empirical investigation includes a sample of 35 Sub-Saharan (SSA) countries which are typically characterised by a high degree of ethnic fragmentation, often emanating from haphazardly drawn colonial borders, while the legal systems in Africa have been exogenously implanted by the respective colonial powers. Our main results show that although the adoption of common British law (\textit{Common}) is generally associated with better economic outcomes, in the presence of high ethnic heterogeneity the French civil law (\textit{Civil}) outperforms British common law in terms of national economic performance because it is more effective in promoting political stability, and coordination. The latter characteristic is necessary for the efficient use of natural resources that are often abundant in SSA countries and constitute a major source of government revenue.

Keywords: Legal Origins, Ethnic Heterogeneity, GDP per Capita, Technical Efficiency, Sub-Saharan Africa

JEL Classification: 047,055

Suggested Citation

Bournakis, Ioannis and Rizov, Marian and Christopoulos, Dimitris, Revisiting the Economic Performance and Institutions Debate in SSA Countries: The Role of Legal Origins in the Context of Ethnic Heterogeneity (March 10, 2021). Available at SSRN: https://ssrn.com/abstract=3801726 or http://dx.doi.org/10.2139/ssrn.3801726

Ioannis Bournakis (Contact Author)

Middlesex University ( email )

The Burroughs
London, NW4 4BT
United Kingdom
02084115349 (Phone)

American University in Cairo ( email )

AUC Avenue
P.O. Box 74
New Cairo, 11835
Egypt
11835 (Fax)

Marian Rizov

University of Lincoln (UK) - Lincoln International Business School ( email )

Brayford Pool
Lincoln, LN6 7TS
United Kingdom

Lincoln Economics and Finance (LEAF) Research Group ( email )

United Kingdom

Dimitris Christopoulos

Athens University of Economics and Business ( email )

76 Patission Street
Athens, 104 34
Greece

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