The Origins of Inequality in Sub-Saharan Africa
Economic inequality can be conceived of on a number of scales, from the international to the regional and individual levels. Recent research has demonstrated that an important source of within country inequality is inequality between ethnic groups. However, it is also the case that inequality within groups varies significantly, and that this variation may affect political behaviour either directly or indirectly by conditioning the effect of between group inequality. Although between group inequality has been shown to be largely determined by disparities across groups in access to resources such as rivers, high quality soils, and minerals, in this paper we show that these kinds of disparities only partially explain levels of within group inequality. We argue that contemporary within group inequality in Africa is partly determined by a group’s historical stateness. In particular, ethnic groups with highly centralized pre-colonial institutions tend to have lower levels of within-group inequality today. We develop two mechanisms explaining the relationship. First, ethnic groups with centralized pre-colonial institutions can more easily distribute public goods among their members. Second, highly organized ethnic groups have more within-group accountability. Both of these processes in turn should lead to lower inequality. Using a dataset on more than 250 ethnic groups in sub-Saharan Africa, we find strong evidence in favor of our main hypothesis: ethnic groups with more centralized pre-colonial institutions are more equal today. We also test some of the implications of the two mechanisms we propose and find support for both mechanisms. This is the first study to demonstrate that early political institutions have shaped current levels of economic inequality in sub-Saharan Africa.