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Isolated and Poor: the cost of remoteness from the capital city

Provenzano, Sandro (2020) Isolated and Poor: the cost of remoteness from the capital city. Geography and Environment Discussion Paper Series (9). Department of Geography and Environment, LSE, London, Uk.

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Abstract

This paper investigates whether areas isolated from the capital city are less de- veloped economically in Sub-Saharan Africa. We apply a boundary-discontinuity design using national borders that divide pre-colonial ethnic homelands to obtain quasi-experimental variation in distance to the national capital city. Based on night- lights and geocoded surveys, we find that a one percent increase in distance to the capital city causes a decrease in the probability of detecting nightlights by 3 percent- age points and a reduction in household wealth corresponding to 3.5 percentiles of the national wealth distribution. Our results suggest that a lower provision of public goods in isolated areas is a key link between remoteness and economic performance. Despite receiving worse services, people who are isolated exhibit a higher level of trust in their political leaders. We interpret this as pointing towards dysfunctional accountability mechanisms that reduce the incentives of state executives to invest into isolated areas.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.lse.ac.uk/geography-and-environment/res...
Additional Information: © 2020 The Author(s)
Divisions: Geography & Environment
Subjects: G Geography. Anthropology. Recreation > G Geography (General)
JEL classification: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior
H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O10 - General
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade
Date Deposited: 15 Jul 2020 11:09
Last Modified: 08 Sep 2020 23:06
URI: http://eprints.lse.ac.uk/id/eprint/105688

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