A number of studies have found that British colonialism — specifically its policy of indirect rule — improved local economic development relative to the French policy of direct rule. There is less consensus, however, as to why indirect rule would produce better economic outcomes. This article proposes three mechanisms linking indirect rule to development: the devolution of power to local communities, the empowerment of traditional authorities, and the reification of ethnic identities. Using a geographic regression discontinuity research design on Cameroon's internal anglophone-francophone border, a legacy of the country's dual colonial heritage, the article finds the most evidence for the first mechanism, that citizens on the anglophone side of the border are more likely to act locally and, indeed, see their local institutions as more legitimate. In contrast, we find mixed evidence for the other two mechanisms regarding the power of chiefs and ethnic identities.