Are Borders Barriers? The Impact of International and Internal Ethnic Borders on Agricultural Markets in West Africa - Working Paper 208

This paper addresses two important economic issues for Africa: the contribution of national borders and ethnicity to market segmentation and integration between and within countries. The authors find evidence of an international border effect between Niger and Nigeria for both a grain and a cash crop. The international border effect is lower, however, if the cross-border markets share a common ethnicity. Ethnicity is also linked to higher price dispersion within Niger; there is a significant intranational border effect between markets in different ethnic regions of the country. The authors provide suggestive evidence that the primary mechanism behind the internal border effect is related to the role of ethnicity in facilitating access to credit in agricultural markets. These results are robust to the use of regression discontinuity techniques.