Growth, history, or institutions

Abstract

This article explores the empirical determinants of state fragility in sub-Saharan Africa over the 1992–2007 period. Our dataset includes those sub-Saharan countries for which we have information on the distribution by quintiles of the World Bank Country Policy and Institutional Assessment (CPIA) ratings. We evaluate the potential influence on fragility of a wide range of economic, institutional, and historical variables. Among economic factors, we consider per-capita GDP, both in levels and growth rates, investment, natural resources, and schooling. We also consider economic policy variables such as government expenditures, trade openness, and inflation. Demographic forces are accounted for through the fertility rate, life expectancy, and the youth bulge. Institutional factors are captured by measures of ethnic fractionalization, civil liberties, revolutions, and conflicts, as well as governance indicators. Moreover, we select historical variables that reflect the colonial experience of the region, namely the national identity of the colonizers and the political status during the colonial period. Finally, we account for geographic factors such as latitude, access to sea, and the presence of fragile neighbors. Our central findings is that institutions are the main determinants of fragility: even after controlling for reverse causality and omitted variable bias, the probability for a country to be fragile increases with restrictions of civil liberties and with the number of revolutions. Before controlling for endogeneity, economic factors such as per-capita GDP growth and investment show some explanatory power, but economic prosperity displays a contradictory net impact since growth reduces fragility while investment facilitates it. Moreover, instrumental variables estimates show that per-capita GDP growth is no longer a significant factor. Colonial variables display a marginal residual influence: after controlling for all other factors former colonies are actually associated with a lower probability of being fragile.