Abstract

The 2010 earthquake in Haiti has exposed the extreme vulnerability of a people living in a country where the state and the economy simultaneously fail to deliver. Haiti’s neighbor, the Dominican Republic, has witnessed several phases of strong economic growth since the 1870s and an encouraging transition towards democratic rule in the late 20th century. How could this Caribbean island drift apart so profoundly? Capitalizing on decades of seminal scholarship in the neo-institutional tradition North, Wallis and Weingast (2009) have developed a new conceptual framework to explain different performance characteristics of societies through time. In this study we put the latest vintage of institutional theory to the test by taking it to the case of Hispaniola. We conclude that it captures the differing internal logic of the political economy in both countries quite well, but that it is of little use to understand the effect of external (international) relations on long term development.

Abstract

Recent studies on African economic history have emphasized the structural impediments to African growth, such as adverse geographical conditions and extractive colonial institutions. The evidence is mainly drawn from cross-country regressions on late 20th century income levels, assuming persistent effects of historical causes over time. But to which extent has African poverty been a persistent phenomenon? Our study sheds light on this question by providing new evidence on long-term African growth-trajectories. We show that slave trade regressions are not robust for pre-1970s GDP per capita levels, or for pre-1973 and post-1995 growth rates. We calculate urban unskilled real wages of African workers in nine British African countries 1880-1965, adopting Allen’s (2009) subsistence basket methodology. We find that real wages were above subsistence level, rose significantly over time and were, in major parts of British Africa, considerably higher than real wages in Asian cities up to, at least the 1930s. We explain the intra-African variation in real wage levels by varying colonial institutions concerning land alienation, taxation and immigration.

Abstract

This paper offers time-series of urban unskilled labor wages and commodity prices in eight British African colonies (1880-1940) and shows that real wages were above subsistence level and rising, especially during the interwar years. Real wages in West Africa and Mauritius were even considerably higher than in some major Asian cities. Our results cast doubt on studies emphasizing the existence of ‘structural impediments’ to African economic growth. We also document an East-West divergence within Africa and argue this was caused by variations in colonial land and labor market institutions, challenging the view that African colonial institutions were exclusively extractive.