Democracy and Institutions in Postcolonial Africa

Africa has seen a steady rise in democracy since the end of the Cold War. This paper investigates two possible implications of democratization in African countries: better economic growth through improved institutions and less civil conflict through increased political participation. Instrumental variables regressions parallel to those in the literature are estimated using a new instrument: the spatial lag of democracy. This instrument varies over time, allowing for consideration of country fixed effects in IV regressions. Results show significant effects of democratization on growth and civil conflict in IV regressions with country fixed effects. The overall results indicate that there are positive impacts of institutions on economic growth and of political participation on reducing civil conflict in IV regressions with fixed effects.