Subnational Border Reforms and Economic Development in Africa

Abstract

This paper is the first that comprehensively identifies all territories in Africa affected by subnational border reforms during 1992-2013 with GIS methods. With this data, we study the effect of subnational border reforms on local economic development. Difference-in-difference regressions at the grid-level with nighttime luminosity as proxy for local economic activity suggest that border changes have, on average, positive long-run economic effects. However, we also observe significant country-level heterogeneity, which suggests that prevailing institutions as well as fundamental country-specific characteristics are vital determinants of the economic efficacy of subnational border changes. The (official) reasons given for subnational border changes are less important.