Essays on Development and Politics in Sub-Saharan Africa

University dissertation from Uppsala : Department of Economics

Abstract: Essay I: The African National Congress (ANC) can look back on eighty years of struggle which resulted in the liberation of black Africans, the creation of a democratic constitution and free elections. However, the last twenty years of ANC rule has been criticized for the failure to bring higher living standards for the formerly oppressed. With the party's dominance and the challanges facing South Africa in mind, I estimate the effect of ANC power in municipalities on economic, social and budgetary outcomes. To estimate the causal effect of the party, this paper uses an instrumental variable approach developed by Freier & Odendahl (2012) and a regression discontinuity design. Taken together, the results point to an adverse effect of the party: less is spent on repairs and water provision which in turn may explain why ANC power seems to lower the share of individuals who have access to piped water and electricity. Further, more resources are used on municipal employees and the councillors themselves, while I find suggestive evidence of an increase in the poverty rate due to the party. From the IV analysis, I find indications that oppositional parties many times have a more positive impact on outcomes as they gain power at the expense of the ANC.Essay II (with Evelina Bonnier, Thorsten Rogall and Miri Stryjan): How do political elites prepare the civilian population for participation in violent conflict? We empirically investigate this question using village-level data from the Rwandan Genocide in 1994. Every Saturday before 1994, Rwandan villagers had to meet to work on community infrastructure, a practice called Umuganda. This practice was highly politicized and, in the years before the genocide, regularly used by the local political elites for spreading propaganda. To establish causality, we exploit cross-sectional variation in meeting intensity induced by exogenous weather fluctuations. We find that an additional rainy Saturday resulted in a five percent lower civilian participation rate in genocide violence. This result is entirely driven by places under the control of the pro-genocide Hutu parties. In the few places with the pro-Tutsi minority in power the effects reverse. The results pass a number of indirect tests regarding the exclusion restriction as well as other robustness checks and placebo tests.Essay III (with Sebastian Axbard and Anja Tolonen): Extractive industries are key to development in many countries, accounting for large shares of government revenue and GDP. However, a vast and growing literature links extractive industries to conflicts and war in countries with weak institutions. This study is, to our knowledge, the first to investigate whether extractive industries can cause property and violent crime in a middle-income country. We focus on South Africa, a country with a significant mining industry and high crime levels, similar to Botswana, Brazil, and Mexico. Our empirical strategy exploits temporal and spatial variation in mining, in addition to fluctuations in international mineral prices, to estimate the effect of mining activity on crime. In contrast to studies in lower income countries focusing on conflict and war, we find that the start of natural resource extraction is not linked to higher levels of crime. However, the closure of a mine leads to a large and significant increase in both property and violent crime. Subsequently, we show that the migration flows and income opportunities created by the mining industry are two important channels through which mining affects criminality. The findings illustrate that the volatile nature of the sector can be a threat to social stability and security.Essay IV: Guided by recent models on and anecdotal evidence of information and revolutions, I set out to estimate the effect of faster Internet speeds on social protests in Africa. I use the fact that Africa has seen large increases in Internet speed as it has been reached by submarine cables during the last couple of years. Using outcome data from ACLED, I find large, negative effects on the number of protests in African cities as a consequence of faster Internet. In particular, as Internet speed increases with one percent, protests decrease with around 2 percent. I find no significant results on other types of events (using the same source), such as wars or change of territory, and the estimates are robust to several different specifications. The overall negative result is confirmed with data from the Afrobarometer survey where I also find that Internet use increases when connectivity gets better. However, young people state that they have participated in protests to a larger extent due to better Internet connections and they seem to constitute a group who protests often. These findings indicate that the results depend on how Internet services are used and that young individuals use them very differently compared to other groups. Nevertheless, the negative effects for other groups are larger and so the overall sign is unambiguously negative. Thus, the results in this paper put the idea of Internet and social media as tools for freedom into question.Essay V (with Jonas Hjort): We exploit the plausibly exogenous arrival of submarine cables to African coastal cities to estimate the effect of faster Internet speeds on economic activity. We use data on Internet speeds for a sample of over 200 African cities over a seven-year period and establish a strong and large first-stage effect: as a city is connected to a submarine cable, Internet speed increases with around 30 percent. We then match the speed data to several data sources on economic activity in Africa. Taken together, the results point to positive effects of faster Internet connectivity on economic activity. Economic growth, as proxied by light density at night, sees a large increase when submarine cables arrive. More people are employed and their incomes increase. The probability to be a business owner goes up and the number of newly established firms, especially in the private sector, increases.

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