Spatial Inefficiencies in Africa's Trade Network
I assess the efficiency of transport networks for every country in Africa. Using rich spatial data, I simulate trade flows over more than 70,000 links covering the entire continent. I maximise over the space of networks and find the optimal road system for every African state. My simulations predict that Africa would gain 1.1% of total welfare from better organising its national road systems. I then construct a novel dataset of local network inefficiency and I find that colonial infrastructure projects significantly skew trade networks towards a sub-optimal equilibrium. I also find evidence for regional favouritism and inefficient aid provision.
The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.