Subnational Border Reforms and Economic Activity in Africa

ABSTRACT Using GIS methods, we identify territories in Africa affected by subnational border reforms between 1992 and 2013. Descriptive statistics reveal that these territories differed from other African regions across several key dimensions. For example, these territories were more populous and exhibited greater ethnic diversity. We then examine the association between subnational border reforms and economic activity across 17 African countries. Grid‐level estimations indicate a positive association between border reforms and local economic activity. However, allowing for country‐level heterogeneity reveals that border reforms are negatively associated with local economic activity in six countries. Excluding Ethiopia from the sample substantially reduces the magnitude of the overall positive estimate. A systematic examination of heterogeneity reveals that border reforms implemented for administrative purposes are positively associated with economic activity, while those driven by ethnic politics have no effect.