Does colonisation explain differences in trade performance across developing countries? In this paper, we analyse the differential impact of British versus French colonial legacies on the current trade of African ex-colonies. We initially find that former British colonies trade more, on average, than do their French counterparts. This difference might be the result of the relative superiority of British institutions. However, a core concern is the non-random selection of colonies by the British. Historians argue that with Britain, trade preceded colonisation. Using an instrument based on colonisation history to control for this endogeneity, we find no evidence of a systematic difference between the British and French colonial legacies with respect to trade. This finding suggests that the apparent better performance of British ex-colonies might be instead explained by pre-colonial conditions.
A couple of years ago I wanted to write a paper on African pre-colonial economies so I read everything I could on the topic. I never wrote that paper (I couldn’t get the data I was looking for) but if you are interested, I have a few “must reads”:
- Acemoglu, Johnson, and Robinson (2001) “An African Success Story: Botswana” (ungated). You might remember two of the authors from the Why Nations Fail Blog and one from the Baseline Scenario blog. Their paper is excellent.
- Ayittey (1991), “Indigenous African Institutions” (link to google books). This is one of my favourite books on the topic.
- Austin G. (2004) “Markets With, Without, and in Spite of States: West Africa in the Pre-colonial Nineteenth Century” (ungated)
- Bauer PT “From Subsistence to Exchange”. Free chapter here, or full book on Amazon. When I met Tyler Cowen at the Trento Festival of Economics two years ago, he told me that I “must read” this book. He was right.
- Englebert, P. (1999), “Pre-Colonial Institutions, Post-Colonial States, and Economic Development in Tropical Africa,” (Sorry, I can’t find the ungated version)
- Gennaioli, N., and I. Rainer (2007), “The Modern Impact of Precolonial Centralization in Africa” (ungated)
- Nunn, N., (2008a) “The Long-Term Effects of Africa’s Slave Trades” (ungated) Slightly off-topic, relevant nonetheless.
Are there other studies I “must” include in this list?