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This paper assesses the effects of Italian colonialism on long-run political development in former Italian Africa. Through cross-case and contextualized within-case methods, it shows that Italian colonialism is negatively associated with postcolonial state-building and democratization in Somalia and Libya. The findings suggest that political development in Italian Africa is a path-dependent process in which—unless the colonial legacy was ruptured by a critical event, e.g. social revolution in Eritrea—weak state institutions, deep social cleavages, and exclusionary political institutions inherited from colonial rule reproduced themselves through a negative-feedback mechanism, ultimately leading to failed state development and democratization at key junctures of regime transition. Patrimonial postcolonial states, social fragmentation, and authoritarianism represent the channels through which the colonial effect persisted. The paper offers, on one hand, an empirical explanation for puzzling outcomes in Libya and Somalia, and on the other hand, makes theoretical contributions to studies of colonialism and its legacies for state capacity, ethnic conflict, and democracy in Africa.