No One True Path: Uncovering the Interplay between Geography, Institutions, and Fractionalization in Economic Development

Do institutions “rule” when explaining cross-country divergence? This paper finds that to a large extent they do. However, the role of ethno-linguistic fractionalization cannot be ignored. Sufficiently high-quality institutions are necessary if the negative impact on development from high levels of ethno-linguistic fractionalization is to be mitigated. Interestingly, I find no role for geographic factors; neither those associated with climate nor geographic isolation, in explaining divergence. There is also no evidence to suggest a role for religious fractionalization. Finally, my findings affirm earlier work in the literature that sets apart Sub-Saharan Africa’s development process from the rest of the world.