Precolonial centralisation, foreign aid and modern state capacity in Africa

In this paper, we empirically explore the determinants of bureaucratic capacity in contemporary Africa. We connect the aid-governance literature with the historical, political economy and anthropological literature on African state formation. Our Ordinary Least Squares (OLS) results show that there is a positive and statistically significant relationship between precolonial centralisation and bureaucratic quality in Africa from the mid-1990s onwards. Before the mid-1990s there is no such relationship. We also find that the often negative and statistically significant effect of aid dependence on bureaucratic capacity disappears, once we control for precolonial centralisation. The OLS results survive a set of robustness tests, including the addition of several control variables and instrumental variable estimation using a variety of instruments suggested in previous research. As the colonial period is slowly fading, the influence of precolonial political institutions on modern state capacity is reasserting itself. Our results provide further evidence for the importance of precolonial centralisation in our understanding of present day economic and political developments on the continent.

Key words: Africa, Foreign Aid, Precolonial Centralisation, State Capacity

Discipline: Development Economics, Political Economy, Political and Economic History

JEL Classification: F35, H10, N47, O11, O55, Z13