ABSTRACT
This chapter discusses the African continent and the nature of institutions with specific focus on the state of politics and emergence of the modem African state. It looks at the issue of ethnicity in Africa and its implications to the organization of society. Units of collective choice that minimize the costs of arriving at cooperative agreements in Sub-Saharan Africa must, to some degree, be based on ethnicity. The emergence of the modem African state is largely the result of a number of events that disrupted the traditional African way of life. Such ethnic units of collective choice can be expected to be better suited to the provision of some public goods. The chapter also discusses the optimal size and composition of nations and presents a model of the state and its constitution based on spatial competition. In this model, the constitution and the state borders are determined simultaneously.
