Decolonization, Legitimacy and Fiscal Capacity: Event Study Evidence from Africa
Authors: Dhammika Dharmapala and Marvin Suesse
A vast literature across several academic disciplines studies the impact of colonial rule, but less attention has been paid to the consequences of decolonization. This paper uses a recently constructed dataset on the fiscal hi story of African countries from 1900 to 2015 to analyze the impact of decolonization on fiscal capacity (defined as revenue from taxes that are relatively difficult to collect and that require more administrative infrastructure). The analysis adopts a staggered difference-in-difference approach, implemented using a stacked event study. It finds no discernible pre-trends prior to decolonization, and a substantial increase in fiscal capacity starting about 5-6 years after decolonization. This result – which implies substantial state-building activity in postcolonial Africa – is robust to tests for a variety of alternative explanations, the use of alternative control groups, and the use of generalized synthetic control methods. We also show that this effect is not explained by democratization or improved public goods provision. Our conceptual framework instead posits that post-colonial states were able to increase tax revenues from hard-to-collect sources because their higher degree of legitimacy improved citizens’ tax morale. We offer historical evidence that is consistent with this channel. Our finding – that colonial rulers invested less in fiscal capacity than did post-independence governments – sheds new light on the consequences of colonial rule, and on the determinants of variation in governments’ fiscal capacity.
Racial Restrictions on Voting: Evidence from a New Pan-Anglophone Dataset, 1730-2000
Author: Dhammika Dharmapala
A substantial literature studies franchise extension, focusing primarily on class-based – rather than race-based – voting restrictions. This paper constructs and analyzes a novel dataset that codes the presence of race-based restrictions on voting in 130 jurisdictions (primarily English-speaking subnational jurisdictions with substantial power to determine their electoral law) over 1730-2000. It documents extensive variation in these restrictions over time and across jurisdictions, exhibiting a cyclical pattern in sharp contrast to the continuous decline in class-based voting restrictions. To explain this variation, the paper uses a framework that emphasizes the distinction between centralized imperial control and the empowerment of local European settlers. A stacked event study analysis of the independence of colonies of settlement shows an absence of pre-trends, and implies that independence had a substantial positive effect on the probability of a racially restrictive franchise. The findings are similar but weaker for other forms of settler empowerment, such as dominion status. These results are robust to controlling for the existence and abolition of property (and other economic) qualifications for voting. They are consistent with a framework in which an imperial or federal government is less subject to capture by local settler elites, and thus more likely to promote franchise extension.
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