In this paper data from the Afrobarometer is used to test the role of social capital and ethnic divisions in determining the quality of schools in Africa.
The paper captures social capital by the average level of trust and ethnic divisions via an index of ethnic fractionalization. It then skirts reverse causality problems between trust and quality of public goods by using historical information on the settlement patterns of ethnic groups in sub-Saharan Africa. This yields measures of ethnic inherited trust which is used as an instrument for trust. To address concerns about endogenous residential sorting, the paper instruments ethnic fractionalization by the initial population density of ethnic historical homelands.
Key findings:
- Using information on the historical settlement patterns of ethnic groups in Sub-Saharan Africa, two measures of inherited trust are considered: trust in close neighbours and generalized trust. Trust inherited by individuals living in a district is strongly related to that found in their ethnic homeland. Trust is to a large part inherited along the ethnic lines.
- OLS estimates of localized trust on the quality of public goods are biased downward. This could be as a result of measurement error in local trust. First, the way that trust is measured by survey question is open to debate. It is not clear to what extent these survey questions can provide reliable measures of trust. Second, the existence of “exclusive clubs” in the districts (like religious groups or Community Based Organizations – CBOs) contributes to the quality of public goods and affects local trust at the same time.
- There are two main possible channels through which social capital can affect the quality of schools in local communities. First, social capital affects community management of school by promoting behaviours recognized as essential ingredients of good governance. It helps local communities to reach consensus, avoid free riding and disputes. Second, the social capital may affect the quality of schools by facilitating interactions among members of communities and lobbying activities. Members of communities may be more effective at getting financial support from government or NGOs to finance schools.
- There is no convincing evidence regarding which channel is the more active in transforming trust into public goods.
