Accountability failure in isolated areas: The cost of remoteness from the capital city

Abstract

This paper documents that in Sub-Saharan Africa areas isolated from the capital city are less economically developed and examines potential underlying mechanisms. We apply a boundary-discontinuity design using national borders that divide pre-colonial ethnic homelands to obtain quasi-experimental variation in distance to the national capital city. We find that isolation significantly reduces nightlights at the intensive and extensive margin, and that a one percent increase in distance to the capital causes a drop in household wealth corresponding to 3.5 percentiles of the national wealth distribution. Our results suggest that a lower provision of public goods in isolated areas is a key link between remoteness and economic performance. Despite receiving worse services, people who are isolated exhibit a higher level of trust in their political leaders. Further, isolated citizens consume the news less frequently and penalize their leaders less for misgovernance. We interpret these findings as pointing towards dysfunctional accountability mechanisms that reduce the incentives of vote-maximizing state executives to invest into isolated areas.