Initial Conditions, European Colonialism and Africa's Growth

Abstract

We investigate the role of initial conditions at colonial independence on economic growth in Africa in the post-independence period using Bayesian Model Averaging (BMA). A key innovation in our estimation methodology is that we incorporate parameter heterogeneity in model averaging as well as try to mitigate the endogeneity problem present in growth regressions. In order to ensure that differences in the growth determinants between Africa and the world are not driven by experiences of an alternative group of countries, we also control for the presence of OECD countries and former European colonies in the global sample. We find that the impact of different initial conditions on growth in Africa is strikingly different from the world. We argue that these initial conditions reflect the state of development at the close of the colonial era and are therefore inherently related with the legacy of colonialism.