Development Economics

The Value of Democracy: Evidence from Road Building in Kenya

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Written by IIEP

Ethnic favoritism – wherein the allocation of government resources is restricted to the members of a leader’s ethnic group – is widely seen as “antithetical” to the ideals of democracy and strong, effective institutions. Particularly in African regions, the phenomenon poses significant barriers to the elimination of patronage systems and clientelism in developing states. In many cases, it can heighten tensions within the government and weaken institutions. In countries with deep (and arbitrarily created) ethnic divides and extraordinary diversity, ethnic identity has been supposed to play a large role for economic progress (or lack thereof) in communities. However, variable factors like data availability, long regime lengths, and government reluctance to acknowledge favoritism make the study of public goods discrimination difficult and unclear. The American Economic Review just published a paper by Remi Jedwab, an affiliate of the Institute for International Economic Policy and Assistant Professor of Economics and International Affairs, and co-authors which examined Kenyan road spending across several decades to uncover the relationship between ethnic favoritism and democracy.

For Jedwab and his co-authors, Kenya provided a fascinating and applicable case study of ethnic favoritism due to the complex political situation post-independence. A country with intense segregation between districts, Kenya nonetheless reflects the story of many Sub-Saharan African nations considered to suffer from the same patrimonial and discriminatory pitfalls. Kenya has also engaged in a significant back-and-forth between autocracy and democracy, often switching between the two under the same leader, the ethnicity of whom also varies by regime. In particular, Kenya has two dominant ethnic groups – the Kalenjin and the Kikuyu – who have split leadership of the country over the last five decades.

In his joint paper titled “The Value of Democracy: Evidence from Road Building in Kenya,” Jedwab and his co-authors worked to create a significant dataset despite a scarcity of sufficient government records – supplementing official documentation with Michelin roadmaps distributed to travelers in Kenya over many years. After mapping the distribution of resources for this infrastructural development, the results were overwhelmingly clear: districts that shared the ethnicity of Kenya’s leader in autocratic years had five times the length of roads built, which are crucial for economic development. The construction of these roads constitutes 15 percent of Kenya’s government spending.

 

This strong effect, however, largely disappeared in the presence of democracy – one of the study’s most important findings. While autocratic periods saw dramatic spikes in disproportionate and discriminatory public funding, democratic periods saw this funding remarkably level. Although democracy is not inevitably associated with an exodus from patronage politics, corruption, and institutional inefficiency, Jedwab’s research found some striking conclusions that are not easily explained by coincidence and which remain constant across two separate, independent datasets.

Democratization often generates an increase in popular expression, a reduction in censorship, and a more vocal civil society – which put leaders under more scrutiny and in the Kenyan example, force the reduction of ethnic favoritism. Even small levels of democratization (or an “imperfect democracy”) can put just enough strain on a President’s power to ensure that public goods are allocated to a more representative distribution of citizens and villages, according to researchers. While Jedwab’s work found strong benefits of democratization in growing human and economic development in all communities, some dilemmas were found: democracy does not necessarily stop a President from “stuffing” his administration with members of his ethnic group, and even a diverse cabinet does little to stop ethnic favoritism without the presence of democracy.

Remi Jedwab’s research provides tangible evidence to identify and measure the effects of democracy, discriminatory distribution of resources, and patronage politics in Kenya. Because of Kenya’s post-independence political history and ethnic characteristics, the findings are applicable to a large portion of Sub-Saharan Africa and show promise for the study of ethnic favoritism, democracy, and economic development across the globe. Therefore, further study of the phenomenon of ethnic favoritism in resource allocation in other countries can help us understand their trajectory from autocracy towards forms of democracy; it could also mark a change in current development strategies that aim to increase human welfare and develop democratic, effective states.

Remi Jedwab is Assistant Professor of Economics and International Affairs. His research focuses on Urban Economics, Development and Growth, Economic History, and Trade. For more research by Prof. Jedwab please visit his website.

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The Institute for International Economic Policy (IIEP), which is located within the Elliott School of International Affairs, serves as a catalyst for high quality, multi-disciplinary, and non-partisan research on policy issues surrounding economic globalization. The Institute research program helps develop effective policy options and academic analysis in a time of growing controversies about international economic integration in many countries around the world. The institute's work also encompasses policy responses for those who face continued poverty and financial crises despite worldwide economic growth. Affiliated faculty have appointments in the departments of economics, history, and political science as well as the law and business schools.

About the author

IIEP

The Institute for International Economic Policy (IIEP), which is located within the Elliott School of International Affairs, serves as a catalyst for high quality, multi-disciplinary, and non-partisan research on policy issues surrounding economic globalization. The Institute research program helps develop effective policy options and academic analysis in a time of growing controversies about international economic integration in many countries around the world. The institute's work also encompasses policy responses for those who face continued poverty and financial crises despite worldwide economic growth. Affiliated faculty have appointments in the departments of economics, history, and political science as well as the law and business schools.

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