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Road to division: Ethnic favoritism and road infrastructure in Ethiopia

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  • Perra, Elena

Abstract

This paper investigates the role of ethnic favoritism in the long run allocation of road infrastructure in Ethiopia. I construct a 5 km2 grid cell panel by merging road network data from the late 1960s to 2016 with high resolution maps of local ethnic composition. Using a quasi-experimental empirical design, the study finds that cells where the local majority shares the ethnicity with the ruling elite receive 8.7 percent additional road investments and see a 13.8 improvement in road surface quality than otherwise comparable non co-ethnic cells. Exploiting the phased rollout of the Road Sector Development Program between 1997 and 2016, I also document that new roads raise night lights intensity by 0.27 standard deviations in cells benefiting from the program and by 0.51 standard deviations in co-ethnic areas, with larger effects for earlier investments. These findings suggest that ethnic alignment and the availability of large public funds jointly shape the placement of road infrastructure, influencing local economic dynamics.

Suggested Citation

  • Perra, Elena, 2026. "Road to division: Ethnic favoritism and road infrastructure in Ethiopia," Journal of Comparative Economics, Elsevier, vol. 54(2), pages 350-366.
    • Handle: RePEc:eee:jcecon:v:54:y:2026:i:2:p:350-366
    DOI: 10.1016/j.jce.2025.12.002
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    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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