Public infrastructure provision and ethnic favouritism: Evidence from South Africa

Abstract

Does coethnicity with the President affect public infrastructure provision in South Africa? Using municipal-level data for 52 district municipalities from 1996 to 2016, we find that municipalities coethnic with the President are associated with higher water infrastructure provision relative to non-coethnic municipalities. Taking into account various political considerations, results show that ethnic favouritism occurs due to ethnic altruism. Our findings remain robust to different specifications of coethnicity thresholds and are applicable to electricity infrastructure provision. Results suggest that in order to minimise ethnic favouritism, politically independent institutions should oversee the allocation of funding and provision of infrastructure.