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Endogenizing fractionalization

Published online by Cambridge University Press:  27 May 2005

PETER T. LEESON
PETER T. LEESON
Affiliation:
Department of Economics, George Mason University
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Abstract

In this paper I identify fractionalization as a consequence rather than solely a cause of poor institutions. I investigate how heterogeneous agents in precolonial Africa relied on social distance-reducing signals to make trade with one another possible. I then show how colonial institutions created noise in these signals, inhibiting widespread cooperation. By stifling trade between diverse agents, colonial institutions contributed to Africa's poor economic growth.

Type
Research Article
Information
Journal of Institutional Economics , Volume 1 , Issue 1 , June 2005 , pp. 75 - 98
Copyright
© 2005 The JOIE Foundation

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Footnotes

I am grateful to Peter Boettke, Tyler Cowen, Chris Coyne, Melissa Thomas, Richard Wagner and three anonymous reviewers for helpful comments and suggestions. The financial assistance of the Mercatus Center and the Oloffson Weaver Fellowship is also acknowledged.