The (de-)central question: Subnational governments and the making of development in Africa

Yohan Iddawela, Neil Lee, Andrés Rodríguez-Pose 21 February 2021

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The last two decades have seen an upsurge in research on the relationship between institutions and economic development (e.g. Acemoglu et al. 2001, Easterly 2001, Rodrik et al. 2004). This literature finds that higher quality governments lead to better provision of public goods, improved resource allocation, and more efficient democratic processes. Most of these studies, however, have been focussed on national-level institutions. Despite a global trend to devolution, sub-national governments have been largely neglected. Only recently have studies begun to focus on sub-national government, generally finding that differences in quality at this level shape differences in regional economic performance in places like Europe (e.g. Rothstein et al. 2013, Charron et al. 2014, Rodríguez–Pose and Garcilazo 2015) or China (e.g. Cai and Treisman 2005, Cole et al. 2009, Rodríguez–Pose and Zhang 2019).

African sub-national institutions have, however, attracted far less attention. This a surprising omission for two reasons. First, sub-national institutions have historically played an important role in African countries (Michalopoulos and Papaioannou 2013, 2017). The colonial history of several African states involved a form of ‘indirect rule’, which empowered local apparatuses to govern on behalf of colonial empires (Mamdani 1996: 60). Second, since the 1990s, many African states have been undergoing an accelerated process of devolution. Though the experience of African states has been notably diverse, this process means that sub-national governments are increasingly responsible for implementing the development agendas in African states (see Bratton 2012, Erk 2015). 

New measure of sub-national government quality

Our recent paper (Iddawela et al., 2021) has addressed this important gap in sub-national institutional research by creating a new measure of sub-national government quality for 339 regions across 22 African countries. Sub-national government quality has been measured using responses from Afrobarometer, a survey that captures the subjective perceptions of respondents on the quality of sub-national government officials throughout African regions. Variations in sub-national government quality are subsequently connected to differences in regional economic development, which is measured using high resolution satellite data on nightlight luminosity (VIIRS-DNB). 

Figure 1 Sub-national government quality in African countries

Source: Own elaboration, using Afrobarometer data, pooled 2013 and 2015

Figure 1 provides a cross-sectional illustration of variations in sub-national government quality. We can observe greater levels of satisfaction in western Kenyan states, western Namibia, the North-West District in Botswana, Diffa in eastern Niger, and north-western Algeria, as well as parts of Egypt such as Matrouh, Qena, and Aswan. The highest dissatisfaction is found across southern Nigeria and parts of northern Algeria, as well as Tana River in Eastern Kenya. 

There is limited evidence in the government quality index of a polarisation between capitals and the rest of the country. Nor is there a marked urban/rural pattern. Many rural areas in, for example, north-eastern Kenya, northern Ghana, southern Egypt, and northern Mozambique perform better than other more densely populated areas in their countries, while this trend does not hold for Guinea, Senegal, Namibia, or Niger.  

Figure 2 Government quality at a national level

Source: World Governance Indicators, 2015

Figure 2 provides an illustration of national government quality (measured through the World Bank’s 2015 World Governance Indicator). This allows for a comparison between regional government quality with the quality of corresponding national institutions. The best levels of national government quality are found towards Southern Africa, with Botswana, Namibia, and South Africa topping the ranks. Burundi, Guinea, and Liberia have the worst government quality among the countries involved in the analysis. 

Figure 3 Nightlight luminosity (GDP) 2015

Figure 3 provides a descriptive overview of regional-level measures of nightlight density —the proxy for GDP levels. The regions with the highest levels of night light density can be found in Northern Africa. Moreover, a number of Southern African regions such as Gauteng in South Africa and Gaborone in Botswana similarly possess high levels of night light emissions. In West Africa, Rivers, an oil-rich state in Southern Nigeria; and Dakar in Senegal have high levels of GDP. Finally, Mombasa in Kenya has the highest level of regional GDP in East Africa. Rural regions in Nigeria, such as Taraba and Ebonyi State, as well as Inhambane in Mozambique and Kasungu in Malawi have some of the lowest levels of regional GDP in our sample.  This pattern reflects a familiar geography of GDP throughout African sub-national regions.

Sub-national government quality matters for economic development

When linking subnational government quality with levels of development – proxied by GDP – sub-national government quality has a positive and significant impact on regional economic development, independent of variations in national government quality. This remains the case when controlling for other factors that may affect differences in regional development across Africa, including population density, FDI patterns, and environmental conditions (e.g. elevation, temperature, distance to water) in a continent whose development experience has been greatly shaped by its past colonial history (Heldring and Robinson 2013). 

This result remains when controlling for reverse causality – that is, where higher levels of economic development may increase local resources and so government quality. When instrumenting for variations in ‘political centralisation of pre-colonial African societies’, following research from Michalopoulos and Papaioannou (2012, 2013), the relationship between sub-national government quality and economic development remains strong. Sub-national government quality exerts a significant impact on regional economic activity, when accounting for factors such as location, climate, and topographic controls. And this is regardless of variations in the level of central government quality, another factor that also shapes differences in development across African regions.

Sub-national government quality is important, but neglected

Africa is a continent where decentralisation is on the rise. But despite the recent, and sometimes ongoing, transfer of powers and resources to sub-national tiers of government, few questions have been asked about how significant variations in sub-national government quality across the continent may affect the development prospects of Africans. This research has shown the crucial role of sub-national governments in driving economic activity within African regions. Places with better local and regional governments in Africa can end up on the right side of the development divide. Those with weak local government quality will struggle to propel economic development.

Such findings have implications for both academic work and policy. Outside Europe and Asia, academic work on government institutions – and, therefore, most development policies – has tended to focus on the national level. However, in Africa and elsewhere, sub-national government institutions fulfil a range of important functions that are at the heart of development. Hence, sub-national government quality shapes past and future development prospects, even in a context where decentralisation and regional autonomy have not yielded the expected economic returns. For policy, these results highlight the importance of building capacity, increasing voice, transparency and accountability, and stemming corruption at a sub-national level. Focusing on these issues at the national level does not suffice. If the sub-national government dimension continues to be unnoticed, it is likely that most governmental improvements at the national level will end up diluted and the benefits will not reach ordinary citizens.

References

Acemoglu, D, S Johnson, and J A Robinson (2001), “The colonial origins of comparative development: An empirical investigation”, American Economic Review 91(5), 1369-1401.

Bratton, M (2012). “Citizen Perceptions of Local Government Responsiveness in Sub-Saharan Africa”, World Development 40(3), 516–527.

Cai, H, and D Treisman (2005), “Does competition for capital discipline governments? Decentralization, globalization, and public policy”, American Economic Review 95 (3), 817-830.

Charron, N, L Dijkstra, and V Lapuente (2014), “Regional governance matters: Quality of government within European Union member states”, Regional Studies 48 (1), 68-90.

Cole, M A, R J Elliott, and J Zhang (2009), “Corruption, governance and FDI location in China: A province-level analysis”, The Journal of Development Studies 45 (9), 1494-1512.

Easterly, W (2001), The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics, Boston: MIT Press.

Erk, J (2015), “Iron houses in the tropical heat: Decentralization reforms in Africa and their consequences”, Regional and Federal Studies 25 (5), 409-420.

Heldring, L, and J Robinson (2013), “Colonialism and development in Africa”, VoxEU.org, 10 January. 

Iddawela, Y, N Lee, and A Rodriguez-Pose (2021). “Quality of sub-national government and regional development in Africa”, Journal of Development Studies. DOI: 10.1080/00220388.2021.1873286

Mamdani, M (1996), Citizen and Subject: contemporary Africa and the legacy of late colonialism, New Jersey: Princeton university Press.

Michalopoulos, S, and E Papaioannou (2012), “The long-run effects of the Scramble for Africa”, VoxEU.org, 6 January.

Michalopoulos, S, and E Papaioannou (2013), “Pre-colonial ethnic institutions and contemporary African development”, Econometrica, 81 (1), 113-152.

Michalopoulos, S, and E Papaioannou (2017), “The contemporary shadow of the Scramble for Africa”, VoxEU.org, 1 March. 

Rodrik, D, A Subramanian, and F Trebbi (2004), “Institutions rule: the primacy of institutions over geography and integration in economic development”, Journal of Economic Growth, 9 (2), 131-165.

Rodríguez-Pose, A, and E Garcilazo (2015), “Quality of government and the returns of investment: Examining the impact of cohesion expenditure in European regions”, Regional Studies, 49 (8), 1274-1290.

Rodríguez‐Pose, A, and M Zhang (2019), “Government institutions and the dynamics of urban growth in China”, Journal of Regional Science.

Rothstein, B, N Charron, and V Lapuente (2013), Quality of government and corruption from a European perspective: a comparative study on the quality of government in EU regions, London: Edward Elgar.

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Topics:  Development Institutions and economics

Tags:  subnational government, Development policy, Africa, decentralisation

Researcher, London School of Economics; Director, 505 Economics

Lecturer in Economic Geography, London School of Economics

Princesa de Asturias Chair and Professor of Economic Geography, London School of Economics; Research Fellow, CEPR

CEPR Policy Research