The impact of precolonial political centralisation on local development: Ghana’s paradox

ABSTRACT I investigate the impact of precolonial political centralisation (PPC) on local development in Ghana. Accounting for the potential endogeneity associated with the emergence of political centralisation, I find that PPC has a strong negative impact on local development. Further, PPC does not significantly correlate with the provision of local public goods. These results are robust to a battery of sensitivity checks and a wealth of controls at a fine unit. Two mechanisms plausibly explain these findings. First, I show that past colonial public investments, which still significantly determine contemporary development outcomes in Ghana, disfavoured politically centralised regions. Second, I argue that in centralised areas colonial rule might have empowered despotic local patrons who served the interest of the colonial state at the expense of local development.