TITLE:
Heterogeneity and Colonial Governance
AUTHORS:
Nobuhiro Mizuno
KEYWORDS:
Colonial Rule, Delegation, Heterogeneity
JOURNAL NAME:
Theoretical Economics Letters,
Vol.5 No.2,
April
17,
2015
ABSTRACT: Some existing studies
argue that indirect colonial rule adversely affects postcolonial development.
To analyze the situation under which a colonial power adopts indirect rule to
govern a colony, we analyze a delegation model wherein the colonial power
decides whether to delegate policy choice to an agent who has an information
advantage but has different policy preferences from that of the colonial power.
The colonial power decides whether to delegate policy choice in multiple
districts, and can acquire information by paying a cost in each district. We
show that colonial powers are prone to adopt indirect rule when the
heterogeneity among districts is high. The results are a possible explanation
for why colonial powers utilized indirect rule in Africa, a region with high
levels of ethnic diversity.