Three Essays in Political Economy of Development

Abstract

Chapter 1 exploits the emergence of two de facto states in Côte d’Ivoire during the 2002-2010 political crisis to examine the effects of export tax reduction on the living standards of cocoa farming households. Combining both spatial and temporal variations in exposure to a set of dichotomous export tax policies, I find that farmers in low export tax districts significantly increased their consumption expenditures relative to farmers in high export tax districts. I also provide evidence that the transmission of border prices to local farmers is a relevant mechanism through which the reduction of trade barriers enhances cocoa farmers’ living standards. Chapter 2 documents that contemporary political development in Africa is highly associated with the pre-colonial ethnic institutional background of the first national leaders. Using either direct measures of democracy and/or covariates of political participation from anthropological records, I show that the political legacy of the first African heads of states who inherited egalitarian and democratic norms from their ancestors has been autocracy. This statistical relationship is not only robust to an array of control variables including economic, geographic and historical fac- tors, but potential endogeneity concerns that may undermine its validity are also addressed. Finally, exploring the potential mechanisms at play, I provide evidence that the natural resource potential of certain countries may have diverted their first national leaders away from their ancestral institutional heritage. Chapter 3 shows a strong and positive relationship between the ethnic affiliation of African leaders and satellite nighttime luminosity in the historical homelands of ethnic groups. Using a unique dataset on 630 ethnicities and 86 leaders from 48 African countries, I show that luminosity is on average 75% relatively higher in leaders’ ethnic homelands.