Ethnicity has received increased attention in studies of Africa's economic and institutional development. We present evidence on the long-term effects of Britain's "divide-and-rule" colonial strategy that deliberately fostered ethnic rivalries to weaken and control locals. Using micro data from Sub-Saharan Africa, we found that citizens of Anglophone (as compared to Francophone) countries are more likely to:

(1) attach greater importance to ethnic identity (vis-a-vis national identity);
(2) have weaker norms against tax evasion; and
(3) face extortion by non state actors.

We address endogeneity concerns using IV regression and regression-discontinuity. These results suggest that Britain's divide-and-rule strategy may have undermined state-building.

Merima Ali

Senior Researcher

Odd-Helge Fjeldstad

Research Professor, Coordinator: Tax and Public Finance