TEL  Vol.5 No.2 , April 2015
Heterogeneity and Colonial Governance
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.
Cite this paper: Mizuno, N. (2015) Heterogeneity and Colonial Governance. Theoretical Economics Letters, 5, 268-272. doi: 10.4236/tel.2015.52032.

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