Was the wage burden too heavy? : Profitability and wage shares of settler agriculture in colonial Malawi, c 1900-1960

The historical role of European farming in southern and central Africa is a delicate matter that has received a great deal of attention among scholars over the years. Going through this vast literature a striking consensus emerges: success or failure of European farming in southern Africa was to a large extent depending on their access and control over labour. These propositions have so far never been systematically and empirically tested. This paper is an attempt to do that by analyzing the ‘wage-burden’ European settler farmers faced. The wage-burden is identified by measuring wage shares (total amount paid in the form of wages as a share of total profits) on European farms in colonial Africa. Based on archival documents we construct time-series for value of output, transportation costs, investments and wage shares for European tobacco and tea farms in colonial Malawi. Our estimates show that the wage burden decreased significantly after 1930s, i.e. the European farmers were able to capture a larger part of the rent over time. We argue that the developments cannot be explained by domestic colonial policies, but changes in regional migration patterns, which had a significant impact on the supply of farm labour

How Africans shaped British colonial institutions: evidence from local taxation

The institutions that governed most of the rural population in British colonial Africa have been neglected in the literature on colonialism. We use new data on local governments, or "Native Authorities,"to present the first quantitative comparison of African institutions under indirect rule in four colonies in 1948: Nigeria, the Gold Coast, Nyasaland, and Kenya. Tax data show that Native Authorities' capacity varied within and between colonies, due to both underlying economic inequalities and African elites' relations with the colonial government. Our findings suggest that Africans had a bigger hand in shaping British colonial institutions than often acknowledged

Understanding Long-Run African Growth: Colonial Institutions or Colonial Education? Evidence from a New Data Set

Long-term growth in developing countries has been explained in four frameworks: ‘extractive colonial institutions’ (Acemoglu et al., 2001), ‘colonial legal origin’ (La Porta et al., 2004) ‘geography’ (Gallup et al., 1998) and ‘colonial human capital’ (Glaeser et al., 2004). In this paper we test the ‘colonial human capital’ explanation for sub-Saharan Africa, controlling for legal origins and geography. Utilizing freshly collected data on colonial-era population density and education, we find that in sub-Saharan Africa, high European population mortality did not lead to low European population densities, contra Acemoglu et al., (2001). Further, we find that instrumented human capital explains long-term growth better, and shows greater stability over time, than instrumented measures for extractive institutions. We therefore suggest that the impact of the disease environment on African long-term growth runs through a human capital channel rather than an extractive-institutions channel. The effect of education is robust to including variables capturing legal origin and geography, which have additional explanatory power. We also find some evidence that institutions are endogenous to education.Africa, growth, institutions, education, colonial history

Long-term trends in income inequality:Winners and losers of economic change in Ghana, 1891-1960

This paper contributes to a growing literature on long-term trends and drivers of pre-industrial inequality by providing new stylized facts on the evolution of income inequality in Ghana from 1891 to 1960. Using newly constructed social tables, we estimate the Gini coefficient for seven consecutive decades at a time in which the adoption and expansion of cocoa cultivation transformed the Ghanaian economy. Income inequality was already high in 1891, prior to the spread of cocoa cultivation, and it remained stable for four decades. Following a small decline in the early 1930s, inequality increased, reaching its highest level at the end of the colonial era. The expansion of cocoa cultivation and increasing cocoa incomes contributed to persistent high inequality levels until the 1930s. By contrast, the increase in inequality from 1930 to 1960 was largely due to the rising incomes of government employees, skilled workers, and commercial workers

Two concerns about the interpretation of the estimates of historical national accounts before 1850

As contribution to the debate about the interpretation of the process of economic growth before the Industrial Revolution, we discuss two concerns about the currently available estimates of historical national accounts and the way in which these estimates should be interpreted. Firstly, we argue that estimates of the long-Term trends of economic growth should make use of all information contained in time series of Gross Domestic Product (GDP henceforth), and therefore use standard regression analysis to establish those trends. Secondly, we point to the problem that the time series of historical GDP are based on very different estimation procedures, which probably affect the outcome in terms of the level of GDP per capita in the period before 1850. Both concerns imply that we do not entirely agree with Jack Goldstone's views of pre-industrial growth. In particular, his conclusion that growth was cyclical before 1800 is inconsistent with the available GDP estimates, which point to sustained growth, albeit at a very low rate

Understanding Long-Run African Growth: Colonial Institutions or Colonial Education? Evidence from a New Data Set

Long-term growth in developing countries has been explained in four frameworks: ‘extractive colonial institutions’ (Acemoglu et al., 2001), ‘colonial legal origin’ (La Porta et al., 2004) ‘geography’ (Gallup et al., 1998) and ‘colonial human capital’ (Glaeser et al., 2004). In this paper we test the ‘colonial human capital’ explanation for sub-Saharan Africa, controlling for legal origins and geography. Utilizing freshly collected data on colonial-era population density and education, we find that in sub-Saharan Africa, high European population mortality did not lead to low European population densities, contra Acemoglu et al., (2001). Further, we find that instrumented human capital explains long-term growth better, and shows greater stability over time, than instrumented measures for extractive institutions. We therefore suggest that the impact of the disease environment on African long-term growth runs through a human capital channel rather than an extractive-institutions channel. The effect of education is robust to including variables capturing legal origin and geography, which have additional explanatory power. We also find some evidence that institutions are endogenous to education

Understanding Long-Run African Growth: Colonial Institutions or Colonial Education? Evidence from a New Data Set

Long-term growth in developing countries has been explained in four frameworks: ‘extractive colonial institutions’ (Acemoglu et al., 2001), ‘colonial legal origin’ (La Porta et al., 2004) ‘geography’ (Gallup et al., 1998) and ‘colonial human capital’ (Glaeser et al., 2004). In this paper we test the ‘colonial human capital’ explanation for sub-Saharan Africa, controlling for legal origins and geography. Utilizing freshly collected data on colonial-era population density and education, we find that in sub-Saharan Africa, high European population mortality did not lead to low European population densities, contra Acemoglu et al., (2001). Further, we find that instrumented human capital explains long-term growth better, and shows greater stability over time, than instrumented measures for extractive institutions. We therefore suggest that the impact of the disease environment on African long-term growth runs through a human capital channel rather than an extractive-institutions channel. The effect of education is robust to including variables capturing legal origin and geography, which have additional explanatory power. We also find some evidence that institutions are endogenous to education