We use a new dataset from Burundi to analyze the role of local institutions as determinants of income, distinguishing between three distinct dimensions of the institutional framework: (i) property rights security, (ii) local political leadership and (iii) social capital. Using measures of conflict intensity during the civil war as instruments for local institutional quality, we demonstrate that property rights security is the most significant driver of long- term income. These insights extend earlier results from cross-country income regressions, and confirm the scope for institutional reform to lift African communities out of poverty.
Year: 2008 HiCN Working Paper No. 049