Top PDF Extractive Institutions in Colonial Africa

Extractive Institutions in Colonial Africa

Extractive Institutions in Colonial Africa

At the beginning of the 20th century, trade in the Senegal/Mali region was con- trolled by a group of eight Bordeaux trading firms, while Guinea and Congo were in the hands of business houses from Marseilles or Paris. Smaller traders were allowed a share of exports as long as they respected the prices fixed by the main trading firms. After WWI, the de facto monopsony of these companies grew stronger: eco- nomic crises eliminated competition from smaller companies, German business inter- ests were canceled by the war, and protectionist measures were taken against British trade. Protectionist policies were not applied everywhere and did not completely eliminate non-French trade (especially in Guinea and Dahomey). Nevertheless, the number of the remaining trading firms became sufficiently small to allow agreement and ban entry into the African market (Suret-Canale, 1971). As a result, at the beginning of WWII, fewer than a dozen companies monopolized almost all of trade from French West Africa and two French companies (Soci´ et´ e Commerciale de l’Ouest Africain, Compagnie fran¸caise de l’Afrique Occidentale) and a British one (Unilever) controlled between 50% and 90% of exports (Suret-Canale, 1971, p. 167).
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The economic impact of Italian colonial investments in Libya and in the Horn of Africa, 1920 2000

The economic impact of Italian colonial investments in Libya and in the Horn of Africa, 1920 2000

This paper contributes to the literature that has looked at the effect of migrations, skill transfer, and technological adoption on receiving countries’ productivity. By testing the effect of white agricultural settlement in Africa through the lenses of the Libyan case study, I add to the works of Hornung (2014), Fourie and Von Fintel (2014) and Peri (2012), who have instead focused on the short and long-term spillovers in industry and services, along the same lines of a small but growing literature that has looked at agricultural migrations in developing countries (Bharadwaj and Ali Mirza, 2019; Dell and Olken, 2017). As my results show, settler farming was a special case as it negatively impacted the local agricultural sector despite the migration of more skilled and wealthier farmers, whose settlement led to a misallocation of resources in agriculture and thus reduced indigenous productivity and, arguably, living standards. Furthermore, this article sheds new light on the mechanisms of skills transfer and technological diffusion in agriculture (Parman, 2012; Conley and Udry, 2010; Foster and Rosenzweig, 1995) by showing how, in a dual extractive economy, the potential positive technological spillovers are offset, at least initially, by the unequal distribution of the factors of production, that can undermine indigenous productivity in the short run. I show that in an unequal agricultural economy, the settlement of capital-endowed and technologically more advanced farming elites imposes initial negative externalities on the primary sector thorough a drain on resources, which can have negative spatial spillovers in terms of land productivity. With respect to the literature that deals explicitly with the impact of settler farming and land policies on the African agricultural sector (Sartre, 1964; Mosley, 1982; Feinstein, 2005), I contribute by employing micro-level data that allow for an empirical quantitative analysis of the direct impact and the spatial spillovers of white farming. Although the estimates also pinpoint a temporary negative effect on indigenous agriculture, consistent with the seminal works of Arrighi (1967), Bundy (1979) and Palmer and Parsons (eds.) (1977), this effect is explained by the extraction of mobile resources (camels and workers), as opposed to seizure of land of better quality, and shows an active adaptation of local farmers through extensive farming techniques.
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Colonial Origins and Comparative Development: Institutions Matter

Colonial Origins and Comparative Development: Institutions Matter

Boulhol makes no remarks about whether the institution is extractive or inclusive (depending on the instrument used by AJR– settler mortality rate). His approach is relative: he considers a benchmark country purporting to be affluent and economically developed, which serves as a comparison variable against which other countries in question are weighed. The proportions of the two components are what Boulhol believes would hint at the type of institutions for the setup in the country in question, and would give him the ideal influence of the institutions on economic growth. Boulhol considers institutional quality as an influence on the technological efficiency and possibly the technology diffusion. Here institutions can enter into growth equations through different channels like the level as well as the progress of technological efficiency, and possibly the speed of technology diffusion. Boulhol performs majority of the calculations in the proportion mode, as this form of the equation explains how exactly the institution factor figures out in the model. Taking similar origin points, the institutions (manifested in such formats) are the deterministic variables when countries decide to choose their path to economic growth.
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Ecology, trade, and states in pre colonial Africa

Ecology, trade, and states in pre colonial Africa

1.1.1. State capacity. A wealth of theories exist on the origins of the state, stressing fac- tors such as the relative benefits of “stationary” versus “roving” bandits (Olson, 1993), the relative benefits of different mechanisms for governing markets (Dixit, 2004) con- flict (Besley and Persson, 2010; Gennaioli and Voth, 2012), ease of taxation (Moav et al., 2011), and past investments (Besley and Persson, 2009). This literature has, however, focused overwhelmingly on institutions that exist in the present day or those that were created in the circum-Mediterranean or in European colonies. Less is known about the origins of states that have not been built by Europeans. Pre-colonial states do, however, matter for contemporary African development (Gennaioli and Rainer, 2007; Michalopoulos and Papaioannou, 2012). I provide evidence on the causes of institu- tions indigenous to Africa, linking them specifically to trade.
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Ecology, trade and states in pre colonial Africa

Ecology, trade and states in pre colonial Africa

historic population density by measuring it in 1960. This is published by the United Na- tions Environment Programme. 23 This is reported in Table 5, and the effect of ecological diversity remains intact. This is also true if I include the log of (one plus) population density (not reported). There is indeed a positive correlation between ecological di- versity and population density, but once standard errors are clustered by ethnographic region, this effect is no longer significant (not reported). I do not interpret the effect as causal, since institutions may shape population. Rather, this exercise is only intended to show that population cannot explain away the effect of ecological diversity on states. 5.5. Ethnic diversity. Fifth, it is possible that ecology-specific human capital gives rise to a greater number of ethnic groups in regions of diverse ecology (Michalopoulos, 2011). Following Tilly (1992), competition between these groups may lead them to develop stronger states. Alternatively, more heterogeneous communities might form more so- phisticated institutions in order to reduce conflict (Aghion et al., 2004). To show that ethnic diversity is not driving my results, I return to my sample of artificial countries. For each square, I count the number of ethnic groups that intersect it in Murdock’s map, and include this as an additional control in Table 5. This does not do away with the direct effect of ecological diversity on states in column 2, suggesting that this and the gains-from-trade explanation of states are not mutually exclusive. The results are nearly identical if I control instead for modern day heterogeneity. I measure this by counting the languages reported within each artificial country in the World Language Mapping System (not reported). 24
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Ecology, trade and states in pre colonial Africa

Ecology, trade and states in pre colonial Africa

6.4. Does historical trade matter today? It is not the case today that all African coun- tries have strong states. Even today, a one standard deviation increase in the Gennaioli and Rainer (2007) index of State Centralization predicts a 0.3 standard deviation drop in The Fund for Peace’s Failed States Index for 2012. 35 Michalopoulos and Papaioannou (2012) have shown that pre-colonial states predict greater levels of contemporary devel- opment, as measured by the intensity of night-time lights. In Table 6, I show that histor- ical trade can be used to instrument for these ethnic institutions. Column (1) replicates the main result from Table 3A in their paper: conditional on controls and country fixed effects, “ethnic” institutions predict present-day luminosity. Column (2) uses ecologi- cal diversity as an instrument for these pre-colonial states. The IV estimate is positive and significant. This supports a causal interpretation of the results in Michalopoulos and Papaioannou (2012); ecological conditions that no longer directly influence trade predict institutions that continue to matter in the present.
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Colonial Institutions, Slavery, Inequality, and Development: Evidence from São Paulo, Brazil

Colonial Institutions, Slavery, Inequality, and Development: Evidence from São Paulo, Brazil

Generations of historians have long believed that slavery and the legacy it left were inimical to development. Sokoloff and Engerman (2000), and more recently Nunn (2008) present evidence that slavery had a long-term negative impact on economic growth in the Americas. Brazil was the single largest importer of African slaves in the western hemisphere over a period of nearly three and a half centuries. Around 1580 the Portuguese finally grasped that the indigenous population of Brazil was never going to provide the relatively abundant source of servile labor that the Spanish had encountered in meso-America and the Andes. Few of the slaves imported to Brazil in the colonial era went to São Paulo, going instead to export-boom regions with high labor demand during the sugar, gold, and early coffee cycles. Several centuries of efforts to enslave the indigenous population in São Paulo gave way by the early 1800s to a system based on the enslavement of Africans and their descendents. African slavery always existed in São Paulo under the Portuguese, but was far more prominent in the decades before abolition in 1888 than at any point before. The demand for slaves in São Paulo increased sharply in the second half of the nineteenth century. The construction of railroads in São Paulo beginning in the late 1860s opened the central and western parts of the state to commercial agriculture. The spread of coffee cultivation beyond the Paraiba valley greatly increased the demand for farm labor. Because the slave trade from Africa had ended in 1850s, this demand for labor was initially met by imports of slaves from elsewhere in Brazil. By 1872 ten percent of Brazil’s slave population was concentrated in São Paulo, and only three provinces had more slaves. Between 1872 and the abolition of slavery in 1888 São Paulo had the highest rate of net internal importation of slaves of any province in Brazil (Slenes, 1976). When the available supply of slaves proved
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National institutions and subnational development in Africa

National institutions and subnational development in Africa

Of most relevance from this body of research is our companion paper (Michalopoulos and Papaioannou (2013c)), where we explore the long-lasting importance of ethnic (as op- posed to national) political/institutional traits for contemporary African development. The main finding is that among numerous ethnic-specific features (related, for example, to the type of subsistence economy, occupational specialization, slavery, etc.), the legacy of pre-colonial political centralization appears to be a robust correlate of contemporary regional economic performance (Gennaioli and Rainer (2006, 2007) provide similar cross-country evidence). In contrast to these works that highlight the role of historical persistence at the ethnic level, in this paper we examine the role of national institutions, which have been a dominant theme in the growth literature and in policy circles alike. In addition, our finding that national in- stitutions wield significant explanatory power near the capitals, which rapidly diminishes for regions in the hinterland, highlights the importance of ethnic norms and reveals the coexis- tence of a dual institutional framework within African countries (Lewis (1954), Migdal (1988)). Moreover, a methodological innovation of the present study is that we identify the role of na- tional institutions within partitioned ethnic groups taking advantage of the arbitrary drawing of African borders and thus accounting for any (un)observable ethnic-specific differences across the diverse African tribal landscape. This has significant advantages over works exploiting cross-cultural variation and is motivated by the standard-textbook introduction on the role of national institutions showing the divergence in economic performance within culturally and geographically homogeneous entities, like North and South Korea, or East and West Germany (see Weil (2008)).
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From America to Africa: A Parallel in the Colonial and Federal Experiences

From America to Africa: A Parallel in the Colonial and Federal Experiences

It is common to hear people, Africans in particular, considering the African predicament as a fatality, there- fore irremediable. Others attribute the entire situation to the colonial destructive exploitation. However, the best approach to the African situation, as for me, is the economic dependency of most African states on western countries, which consequently implies their political dependency. In this respect, everyone should agree that those African states are really not independent as they pretend to be, with gorgeous annual celebration of pre- tended independence days. Truly, African states are still under domination, both economically and politically, and even if some of them seem to be aware of their current condition on the international level, one hardly no- tices a real will for finding solutions to remedy the situation. It is evident that many institutions have been founded on regional and continental level such as the Organization of the African Unity (now turned into the African Union), with the aim to eradicate the persistent problems faced by African states. But, to what extent have these contributed to Africans’ welfare so far? It is just a pity that, in the face of the many challenges con- fronting their continent, Africans have persisted with those weak organizations, which have failed to reach the minimum of their objectives as stated, for instance, in the charter of the African Union: continental integration of the African peoples, and development. Indeed, neither OAU nor its successor AU have had any such power over individual states, and being rendered so powerless, those organizations couldn’t settle the various civil wars, crisis and attacks throughout the continent, they couldn’t prevent or settle the putsches and dictatorship on the African continent either. Nor could they act in a trustfully representative way when dealing with international institutions and western governments.
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Western Development Plans: A Re-Examination Of Post-Colonial British West Africa

Western Development Plans: A Re-Examination Of Post-Colonial British West Africa

During the early years of colonial rule, there was considerable debate as to what type of colonial rule was suitable for the administration of West Africa. There was, furthermore, growing concern as to how the people of diverse origins and cultures could be integrated for administrative convenience. Consequently, Britain adopted the policy of indirect rule. The policy was first introduced in Northern Nigeria under the authority of Lord Lugard. Although it had been practiced before in India. Indirect rule was inspired by the belief that the European and the African were culturally distinct though not necessarily unequal, and that the institutions of government most suited to the latter were those which he had devised for himself. (Crowder, 1976: 168)
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The colonial testament: An economic re-interpretation of Europe’s motives for colonizing Africa

The colonial testament: An economic re-interpretation of Europe’s motives for colonizing Africa

Europe, in support of its colonization drives in Africa, put forward that it had an obligation to provide political order on the chaotic political planes of Africa (Crowder, 1968; Dei-Anang, 1964). It was thought that there was a dearth of law, order and stability on the continent due primarily to inter-tribal wars, civil strives within states, and the activities of other undesirable beings. Again, it was held that Africans were incapable of providing for themselves any form of protection and security through organized governments and that they must be guided by the superior political organization of European nations (Okon, 2014). The statesmen of Europe held that colonial rule was a necessary step to provide for the institutionalization of organized structures and institutions to regulate human behavior, protect lives and property, and assure liberty. But this political view of colonization hid a far greater fact: that it was European ammunition which helped keep tribes at each other‟s throats. The policy of „divide and rule,‟ a popular African quote to describe political divisions engendered by imperial powers among locals, was very much practiced by trade companies and European administrative representatives to help provide political leverage conducive for the conduct of trade. On the Gold Coast, for instance, the physical confrontations between Asante and the Fante city-states were propped up by Dutch and English support, respectively.
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Institutions, mobilization and rebellion in post colonial societies

Institutions, mobilization and rebellion in post colonial societies

The fi rst point that we make in this paper is that accounting explicitly for the institutional envi- ronment is both conceptually important and empirically necessary if one is to consistently estimate the parameters of interest in a model such as Gurr and Moore’s. North (1990) defines institutions to be "the rules of the game in a society, or, more formally, [as] the humanly devised constraints that shape human interactions". Acemoglu, Johnson, and Robinson (2001, 2002), Engerman and Sokoloff (1997, 2005) and Banerjee and Iyer (2005), among others, show that institutional arrangements are one of the main deter- minants of the observed pattern of economic development worldwide. Acemoglu, Johnson and Robinson (2001, henceforth, AJR), in a widely-cited article, show that the form taken by colonization in the nine- teenth century has had a persistent and quantitatively important impact on the GDP per capita of the colonized countries right up to the 1990s. They distinguish "extractive" institutions from "settlement" institutions. In the former case, the colonial power faced a high rate of settler mortality and often dis- posed of valuable natural resources in the colony. It therefore built a barebones administration whose sole goal was to secure the fruits of colonization and repatriate profits to the home country. In the latter case, in which the aforementioned conditions were reversed, colonization took the shape of stable and substantial settlement by white colonists, who proceeded to create institutions mimicking those of the colonial power.
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Determinants of Financial Sustainability of Microfinance Institutions in East Africa

Determinants of Financial Sustainability of Microfinance Institutions in East Africa

The financial sustainability of MFIs is a necessary condition for institutional sustainability (Hollis & Sweetman, 1998). It has been argued that unsustainable MFIs will not help the poor in the future because the MFIs will be gone (Schreiner, 2000).According to Nyamsogoro (2010), it is better not to have MFIs than having unsustainable ones indicating how important the sustainability of MFIs is. As many people in East Africa are living below poverty line, the health of MFIs is very critical to the health of the general economy at large. Hence, the objective of this study is to identify the factors that influence the financial sustainability of MFIs in East Africa where poverty is a serious problem.
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The health impacts of extractive industry transnational corporations: a study of Rio Tinto in Australia and Southern Africa

The health impacts of extractive industry transnational corporations: a study of Rio Tinto in Australia and Southern Africa

Despite the impact of extractive TNCs there has been little research to assess their overall population health and equity impact. Accumulated evidence on SDH pro- vides the framework for our understanding of TNC health impacts [14] recognising that TNC practices may directly affect the living conditions and access to services that affect health, and may contribute to the political and socioeconomic inequalities that cause health inequi- ties [27]. In this paper we apply a corporate health impact assessment (CHIA) framework to assess the health impacts of one extractive industry (predominantly mining) TNC, Rio Tinto, in Australia, South Africa and Namibia; three countries with different regulatory struc- tures and significant differences in population health [28]. Our framework is focused on regulatory structures, corporate practices and products, and direct impacts on daily living conditions [29] and complements the 2018 framework by Schrecker et al. [30]. The latter framework links the historical context of global extraction and path- ways to ill health and the consequences for SDH. Schrecker et al. also include an analysis of the political economy of extractivism, focusing on the societal struc- tures, processes, and power relationships that drive and enable extraction [30].
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Shifting Italy/Libya Borderscapes at the Interface of EU/Africa Borderland: A “Genealogical” Outlook from the Colonial Era to Post-Colonial Scenarios

Shifting Italy/Libya Borderscapes at the Interface of EU/Africa Borderland: A “Genealogical” Outlook from the Colonial Era to Post-Colonial Scenarios

to Libya gradually improved, with the aim to facilitate its integration within the Euro-Mediterranean dialogue. Italy was the first European country to approach Libya and Italian then-foreign minister Lamberto Dini expressed his desire that the issue of the 1988 Lockerbie bombing could be solved already in 1998 (Simons, 2003), allowing Libya to restart its relations with the other Mediterranean countries, by declaring that the evidence was that Libya had not been involved in acts of terrorism either directly or indirectly for some time (Matar and Thabit, 2004, 163). This led to the first visit of a western leader to Libya after the Lockerbie incident, when Italian then-Prime Minister Massimo D’Alema went to Tripoli. During his visit in December 1999 D’Alema presented for the first time Italy’s apology for mischief during the long years of colonial occupation. A delighted Gaddafi declared while receiving D’Alema, on 28 November 1999, that “Libya will become Italy’s bridge to Africa and Italy will be for Libya its door to Europe.” In the following years Gaddafi often argued that Italy was a favoured commercial and financial partner for Libya adding that he considered Italy as a strategic ally (Vandewalle, 2006). It is worth mentioning the year 2004 when Gaddafi turned history upside on 7 October by declaring, with Berlusconi standing on his side, that from that moment on the “revenge day” – a reminder of the 1970 expulsion of Italian former colonizers from the Jamahiriya celebrated on the same date – it would be known as “friendship day.” The 2004 visit of the Italy’s then- Prime Minister Berlusconi to Libya was primarily linked to the inauguration on 8 October of the Greenstream pipeline, a natural gas 540 kilometres long submarine pipeline running from Mellitah in Libya to Gela, in Sicily, Italy. 7
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China in Africa: competition for traditional development finance institutions?

China in Africa: competition for traditional development finance institutions?

is important not to neglect the agency of recipient governments, particularly in an era of increasing financial options (Greenhill et al., 2013; Humphrey and Michaelowa, 2013). Second, while recipient government officials clearly have their own agendas and interviews must be interpreted with caution, in our experience they are quite open—and in fact enjoy—discussing the relative merits and motivations of external development financiers with whom they engage regularly. As opposed to officials within bilateral and multilateral agencies, who are less likely to be open about factors driving their lending that do not match their stated mandates of reducing poverty, government officials have no official mandates to defend in this respect and hence no direct incentive to polish up their statements. Third, Swedlund (2017) already undertook a survey of development agency officials in Africa, with the results generally showing little impact of Chinese aid on their decision-making and negotiating power with recipient countries. Rather than replicate that work, our study chose to focus instead on recipient officials to generate fresh evidence from the “demand” side of the development finance relationship.
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The Shame of Not Belonging: Navigating Failure in the Colonial Petition, South Africa 1910–1961

The Shame of Not Belonging: Navigating Failure in the Colonial Petition, South Africa 1910–1961

On the 21 April 1921 a man named B. F. Amos wrote a letter from his home in Durban to Prince Arthur of Connaught, the Governor General of South Africa. Amos was an old soldier, having twice enlisted for British military campaigns in German East Africa during the First World War. In 1920 his wife died, leaving him with four children to bring up on his own. Ineligible for a military pension and out of work, Amos needed help. “ Your Excellency will observe the increased responsibility thrown upon me in the aspect of caring for my four motherless children,” he wrote. At just 250 words, his letter was brief. Besides detailing his military experience – he gave the dates of his enlistment, the regiments with which he served and the c ertification of his character (“ very good ” ) on his discharge certificates – Amos gave no other information about his life in South Africa, his previous employment, his experience of war or his hopes for the future. Indeed, his letter feels disembodied, as if blanched of any emotional content. To that extent it fulfilled the normative template of the colonial petition by being written, as it were, without subjectivity. The following few lines only hint at how Amos felt:
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Colonial income taxpayers and top incomes in Central Africa: Historical evidence

Colonial income taxpayers and top incomes in Central Africa: Historical evidence

The high threshold means that, even allowing for the – relatively – low M, the colonial top income shares are indeed high. The full set of estimates for income shares are given in Tables 5A to 5C, and a selection are plotted in Figures 12 and 13. As a yardstick, we may note that in the US in the 1920s the share of the top 0.1 per cent averaged 6.6 per cent (website of Emmanuel Saez, Table A1). From Figure 12 it may be seen that the corresponding shares were greater in Zimbabwe (from 1927) and Zambia (from 1943), where they exceeded 8 per cent and reached 10 per cent or more for a number of years. In Malawi in 1938 they were close to 8 per cent. As has been stressed, these estimates depend on the control totals, but it would require the income totals to be under-stated by 50 per cent for the colonial shares to be reduced from 10 to 6.6 per cent.
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Towards a Dialogic World: Mediums at work in Post/Colonial South Africa

Towards a Dialogic World: Mediums at work in Post/Colonial South Africa

Since a ghost has many forms of appearance and each haunting has its specificity, a medium perform his or her work in a differentiated ways. I will demonstrate that the main protagonists in J. M. Coetzee’s Waiting for the Barbarians and Zakes Mda’s The Heart of Redness represent two different kinds of mediums—a passive medium and an active one. Set in different transitional phases of South Africa, these two novels depict “anti-dialogic societies” in which different ghosts linger and hang around. 1 For instance, Waiting for the Barbarians is set in an undefined time full of strife and unrest. Though both the setting and characterization are highly allegorical, the story has been interpreted as the history of political and racial conflicts between the white settlers and the black natives in the time of apartheid South Africa. In this case, I will suggest that the barbarians and their history are spectral existences to the Empire. They are perceived as mysterious and threatening manifestations of enemies or outcasts that need to be suppressed.
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The role of institutions in entrepreneurship development in Sub-Saharan Africa

The role of institutions in entrepreneurship development in Sub-Saharan Africa

Second, some offshore locations have arisen as rivals to South Africa. Dubai offers an excellent business environment, including a globally interlinked airport with direct flights to many African destinations and a financial hub with its own set of attractions all subject to English law. Mauritius, which sees itself as the hinge between Africa and Asia, benefits from its extensive double tax agreement treaty network and favourable corporate tax treatment. South Africa, by contrast, imposes relatively high restrictions on inward investment. For example, Cross-border acquisitions of local entities financed wholly or in part by the exchange of shares in the foreign company, or mergers that create domestic shareholdings in a new merged foreign entity, fall under exchange control approval processes. Related to these controls on the externalisation of South African assets, the re- domiciling of South African companies is subject to approval from the minister of finance. Third, South Africa faces considerable geographical obstacles: Being located at the southern edge of the African continent, South Africa does not lie between African countries and extra-regional trading partners – which would boost its role as a gateway – but rather outside of these main geographic currents. Even as a node for RVCs South Africa’s location is unfavourable because it lacks centrality, or is distant from the cores of the global economy and most African countries (World Bank, 2009). For the BLNS countries in SACU such considerations clearly matter less, given their physical proximity to South Africa.
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