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This book examines the evolution of fiscal capacity in the context of colonial state formation and the changing world order between 1850 and 1960. Until the early nineteenth century, European colonial control over Asia and Africa was largely confined to coastal and island settlements, which functioned as little more than trading posts. The officials running these settlements had neither the resources nor the need to develop new fiscal instruments. With the expansion of imperialism, the costs of maintaining colonies rose. Home governments, reluctant to place the financial burden of imperial expansion on metropolitan taxpayers, pressed colonial governments to become fiscally self-supporting. A team of leading historians provides a comparative overview of how colonial states set up their administrative systems and how these regimes involved local people and elites. They shed new light on the political economy of colonial state formation and the institutional legacies they left behind at independence.
Sub-Saharan Africa’s recent economic boom has raised hopes and expectations to lift the regions’ ‘bottom millions’ out of poverty by 2030. How realistic is that goal? We approach this question by comparing the experiences of three front-runners of region-specific development trajectories – Britain’s capital-intensive, Japan’s labour-intensive, and Ghana’s land-extensive growth path –, highlighting some historical analogies that are relevant for, but often overlooked in the current ‘Africa rising’ debate. We draw particular attention to Africa’s demographic boom and the possibilities of a transition to labour-intensive export-led industrialization. Although our exercise in diachronic comparative history offers little hope for poverty eradication by 2030, we do see broadened opportunities for sustained African economic growth in the longer-term.
There is a tight historical connection between endemic labour scarcity and the rise of coercive labour market institutions in former African colonies. This paper explores how European mining companies in the Belgian Congo and Northern Rhodesia secured scarce supplies of African labour, by combining coercive labour recruitment practices with considerable investments in living standards. By reconstructing internationally comparable real wages we show that copper mine workers lived at barebones subsistence in the 1910s-1920s, but experienced rapid welfare gains from the mid-1920s onwards, to become among the best paid manual labourers in Sub-Saharan Africa from the 1940s onwards. We investigate how labour stabilization programs raised welfare conditions of mining worker families (e.g. medical care, education, housing quality) in the Congo, and why these welfare programs were more hesitantly adopted in Northern Rhodesia. By showing how solutions to labour scarcity varied across space and time we stress the need for dynamic conceptualizations of colonial institutions, as a counterweight to their oft supposed persistence in the historical economics literature.
This study presents a new dataset of African trade over the long nineteenth century (1808-1939) We show that sub-Saharan Africa experienced a terms of trade boom comparable to other parts of the ‘global periphery’ up to the mid-1880s; with an exceptionally sharp rise in the five decades before the Berlin conference (1835-1885) followed by a prolonged decline. Using disaggregated trade and price data, we show that West Africa was far more important for French imperial trade than for British imperial trade, and that the terms of trade for West African commodities exported to France peaked in the 1880s. This revises the view that the West African scramble occurred when its main export markets were in decline, and is consistent with French initiative in the scramble for West Africa.
The African Commodity Trade Database (ACTD) aims to stimulate and deepen research on African and global economic history. The database provides export and import series at product level for more than two and a half centuries of African trade (1730-2010). This article in-troduces potential users to some of the major questions that can be explored with African commodity trade data, as well as the sources, structure and limitations of the dataset. The current version of the ACTD is downloadable from the data repository of the African Economic History Network (www.aehnetwork.org/data-research) and will be regularly updated with new data.
The renaissance of African economic history in the past decade has produced a range of new data and approaches that stimulate deeper insights into the long-term social and economic development of Africa. Some of these data and approaches are not just promising, but also problematic. We engage with a recent article by Meier zu Selhausen and Weisdorf (2016) to show how selection biases in the use of Anglican parish registers may provoke overly optimistic accounts of European influences on Africa’s schooling revolution and associated opportunities of gender emancipation. Confronting their dataset – drawn from the marriage registers of the Anglican ‘Namirembe Cathedral’ in Kampala – with Uganda’s 1991 census, we show that trends in literacy and numeracy of people born in Kampala lagged half a century behind those who wedded in Namirembe Cathedral, and that the gender gap widened for a much longer period. We run a regression analysis showing that unequal access to schooling along lines of gender and ethnicity was pervasive throughout the colonial era and argue that European colonial influences did not much to alleviate gender inequality, but instead reconfigured its nature. We also argue that unequal opportunities were sustained through a political coalition of the British colonial administration with the Buganda Kingdom. This paper thus calls for a more sensitive treatment of African realities in the evaluation of European colonial legacies and a critical approach towards the use of new sources and approaches.
Bavel, B. van, and E. Frankema (2017) Wealth inequality in the Netherlands, c. 1950-2015. The paradox of a Northern European welfare state, The Low Countries Journal of Social and Economic History 14, 2, 29-62
This paper reviews the available evidence on post-war trends in Dutch private wealth inequality using a range of scattered sources. Wealth tax records suggest a substantial decline in inequality to the 1970s and, more tentatively, a gradual rise thereafter. In the post-1990 years, Gini-coefficients of private wealth inequality range from 0.8 to 0.9, which is at the high end of the international comparison. Such high levels of private wealth inequality contrast with relatively low levels of net income inequality; a paradox that the Netherlands share with other Northern European welfare states. We hypothesise that publicly funded life-time income security limits the wealth-formation by ordinary Dutch households, while the redistributive taxes required to finance this system are targeting income rather than wealth.
To what extent did the 18th century intensification of the trans-Atlantic slave trade boost commercial agriculture in the coastal areas of West Africa? Exploring the provisioning strategies of 187 British, French, Dutch and Danish slave voyages conducted between 1681 and 1807, we call for a major downward adjustment of available estimates of the slave trade induced demand impulse. We show that during the 18th century, an increasing share of the foodstuffs required to feed African slaves were taken on board in Europe instead of West Africa. We also document considerable variation in provisioning strategies among slave trading nations and across main regions of slave embarkation. We explain these trends and variation in terms of the relative (seasonal) security of European versus African food supplies, the falling relative costs of European provisions and the increasing risks in the late 18th century trade, putting a premium on faster embarkation times.
This chapter reviews the ‘long twentieth-century’ development of ‘modern’ manufacturing in Sub-Saharan Africa from colonization to the present. We argue that classifying Africa generically as a ‘late industrializer’ is inaccurate. To understand the distinctively African pattern of manufacturing growth, we focus our discussion on the dynamic interplay between the region’s specific endowment structures, global economic relationships and government policies. We conclude that the case of Sub-Saharan Africa is best characterized as interrupted industrial growth instead of sustained convergence on world industrial leaders. This is partly because, until very recently, the factor endowments made it very costly for states to pursue industrialization; and partly because successive rulers, colonial and post-colonial, have rarely had both the capacity to adopt and the dedication to sustain policies that modified the region’s existing comparative advantage in primary production, by using their fiscal and regulatory powers effectively to promote industrialization.
This paper comments on studies that aim to quantify the long-term economic effects of historical European settlement across the globe. We argue for the need to properly conceptualize ‘colonial settlement’ as an endogenous development process shaped by the interaction between prospective settlers and indigenous peoples. We conduct three comparative case studies in West, East and Southern Africa, showing that the ‘success’ or ‘failure’ of colonial settlement critically depended on colonial government policies arranging European farmer’s access to local land, but above all, local labour resources. These policies were shaped by the clashing interests of African farmers and European planters, in which colonial governments did not necessarily, and certainly not consistently, abide to settler demands, as is often assumed.
How profitable were foreign investments in plantation agriculture in the Netherlands Indies during the late colonial era? We use a new dataset of monthly quoted stock prices and dividends of international companies at the Brussels stock exchange to estimate the returns to investment in tropical agriculture (1919–1938). We adopt the Dimson–March–Staunton method to compute real geometric annual average rates of return and assess our estimates in an international comparative perspective. We find that returns to colonial FDI in the Netherlands Indies during 1919–1928 were impressive (14.3 %), being almost 3 percentage points higher than the world average. In the following decade 1929–1938 fortunes reversed, with a rate of return of -2.8 % compared to a world average of 2.2 %. Over the entire period the returns to colonial FDI (5.4 % in 1919–1938) were about a factor 2.5 higher than returns to investment in the Dutch domestic economy (2.1 % in 1920–1939). We argue that these returns should be interpreted in a colonial context of systematic labour repression, but that they may also partly reflect a higher risk-premium of investments in colonial commodities.
Building on recent insights from archeology, genetics, and linguistics I challenge Jared Diamond’s grand narrative of the biogeographic roots of world inequality. I argue that this narrative pays insufficient attention to contrasting patterns of human settlement in Africa and the Americas. I develop alternative hypotheses concerning the role of domesticated animals in shaping human disease environments and processes of state formation prior to the Columbian exchange. My overarching objective is to enhance the debate on the deep roots of world inequality by tackling Eurocentric conceptions of world development and exploring the potential of new comparative and multi-disciplinary research perspectives.
In Labour-Intensive Industrialization in Global History, 11 leading economic historians explore whether East Asia’s pathway into modern economic growth can be meaningfully characterized as a trajectory of ‘labour-intensive industrialization’, a route distinct from the North Atlantic capital-intensive path as well as the more diffuse paths of industrialization in the labour scarce regions of the Southern hemisphere. This review essay situates this collective volume in the wider literature on modern economic growth to stake out its main arguments. It proceeds with an integrated overview of the main chapters to discuss some of the shared conclusions as well as some of the internal disagreements. It concludes with some critical reflections on the viability of the concept of labour-intensive industrialization, as well as the possible implications for areas such as Sub-Saharan Africa, which have largely remained outside the global diffusion of modern manufacturing.
This chapter aims to disentangle the causal complex underpinning Indonesia’s ‘green revolution’ in order to assess which aspects of it are, in principle, replicable in other parts of the world and which aspects are not. More in particular this study focuses on the question which elements of the transition in Javanese rice farming are useful for Sub-Saharan African economies, where comparable transitions in crop productivity have not occurred (yet). The main argument is that specific historical and ecological conditions make it unlikely that Indonesia’s green revolution will be replicated in (parts of) Africa, but that Indonesian agricultural policies contain some important lessons for African governments that aspire to promote broad-based rural development.
The historical and social science literature is divided about the importance of metropolitan blueprints of colonial rule for the development of colonial states. We exploit historical records of colonial state finances to explore the importance of metropolitan identity on the comparative development of fiscal institutions in British and French Africa. Taxes constituted the financial backbone of the colonial state and were vital to the state building efforts of colonial governments. A quantitative comparative perspective shows that pragmatic responses to varying local conditions can easily be mistaken for specific metropolitan blueprints of colonial governance and that under comparable local circumstances the French and British operated in remarkably similar ways.
Two decades of substantial economic growth in Africa have challenged the deep-seated Afro-pessimism of the 1990s and 2000s and re-invigorated the academic debate on Africa’s ability to grow out of poverty in the 21stcentury. Although the opinions differ widely on how sustainable current African growth trajectories are, there is a widespread consensus that a fundamental agricultural transformation is key to consolidate current and future welfare gains. This study interprets recent signs of agricultural productivity growth from a long term global historical context, arguing that the combination of present-day developments in information and communication technology, transport infrastructure, demographic growth,urbanization and in macro-economic governance form a fundamental break with African history. This break does not offer any guarantees, but it does raise the probability that Africa will complete a green revolution of its own.
This paper aims to make an empirical and theoretical contribution towards the creation of a continent wide data set on African population extending into the pre-1950 era. We investigate the reliability and the validity of the current population databases with the aim of working towards a consensus on the long term series of African total population with a reliable 1950 benchmark. The cases of Kenya, Nigeria and Ghana are explored to show how uneven coverage census taking has been in colonial and post-colonial Africa and to demonstrate the need for an upward adjustment of the conventional 1950 benchmark. In addition, we discuss the advantages and disadvantages of Patrick Manning’s approach of projecting population growth estimates backwards in time by adopting the available Indian census data as African ‘default growth rates’ and propose an alternative approach by incorporating the demographic experiences of tropical land abundant countries in South East Asia.
The 2010 earthquake in Haiti has exposed the extreme vulnerability of a society where the state and the economy simultaneously fail to deliver. The Dominican Republic has witnessed several phases of rapid economic growth since the 1870s and, from the 1970s onwards, a sustained process of political emancipation. Douglas North, John Wallis and Barry Weingast have developed a conceptual framework to explain different long-term performance characteristics of societies, which we apply to the case of Hispaniola. We argue that it captures the internal logic of the political economy of both societies but fails to account for the effect of different foreign relations. Copyright © 2013 John Wiley & Sons, Ltd.
Economische geschiedenis gaat over de evolutie van armoede en rijkdom in de wereldeconomie. Het vakgebied bestrijkt daarmee een enorm terrein: van het marktverkeer in Mesopotamië onder Nebukadnezar tot de oorzaken van de financiële crisis in 2007– 2008, en van de effecten van de Reformatie op Europees ondernemerschap tot de ontwikkeling van het stedelijk systeem in China onder de Song-dynastie. We moeten in dit overzicht selectief zijn, en proberen vooral de vraag te beantwoorden wat de ‘new economic history’ die zo’n vijftig jaar geleden in de VS opkwam, nieuwe resultaten heeft opgeleverd. Waarbij elk ‘resultaat’, zoals dat onder academici gaat, nog steeds onderwerp is van intens debat.
De afgelopen twee decennia is de economische groei in sub-Sahara- Afrika fors aangetrokken, maar hoe moeten we die groei interpreteren? Is dit een zeepbel die veroorzaakt wordt door gunstige, maar tijdelijke, ontwikkelingen op de wereldmarkt die de vraag naar Afrikaanse natuurlijke hulpbronnen vergroten? Of vinden er dieperliggende structurele veranderingen plaats die voorwaarden scheppen voor moderne economische groei? De door Vidi en het ERC Starting Grant mogelijk gemaakte projecten plaatsen dit belangrijke vraagstuk in een historisch perspectief.
The debate concerning the exact timing and causes of changes in economic leadership constitutes one of the central themes in economic history. This study aims to improve the measurement of economic performance in the United States and Western Europe (Britain, France and the Netherlands) during the long nineteenth century by constructing a new benchmark of sector productivity and new estimates of comparative gdp per capita and per worker. Our main finding is that the Anglo-Dutch and Anglo-American take-overs should be located earlier in time than suggested by the conventional Maddison database. We offer an explanation for this result by looking at differences in sectoral productivity performance as well as the different structures (sectoral employment shares) of the economy.
This contribution builds upon Anne Booth’s extensive work on the differentiated evolution of colonial education systems in East and Southeast Asia. The article probes further into the underlying causes of the poor Dutch legacy. I argue that the spread of popular education was not only hampered by a lack of financial commitment, but also by notable inequalities in the allocation of funds for education and a great reluctance to support initiatives in investment in private education, which, I think, should be interpreted as the result of the metropolitan commitment to secular colonial rule in an overwhelmingly Islamic society.
Recent literature on the historical determinants of African poverty has emphasized structural impediments to African growth, such as adverse geographical conditions, weak institutions, or ethnic heterogeneity. But has African poverty been a persistent historical phenomenon? This article checks such assumptions against the historical record. We push African income estimates back in time by presenting urban unskilled real wages for nine British African colonies (1880-1965). We find that African real wages were well above subsistence level and that they rose significantly over time. Moreover, in West Africa and Mauritius real wage levels were considerably higher than those in Asia.
British colonial rule has often been praised for its comparatively benign features, such as its support of local educational development. This study argues that the impact of British educational policies and investments on the supply of schooling in British Africa should not be overstated. Until 1940, mission schools, mainly run by African converts, provided the bulk of education at extremely low costs. Given the limited financial capacity of missionary societies, the Africanization of the mission was a prerequisite for rising enrolment rates and this only occurred in areas where the demand for Western education was high. The British happened to control most of these “fertile” areas.
Standard economic theories of wage inequality focus on the factor-biased nature of technological change and globalization. This paper examines the long-run development of industrial wage inequality in Latin America from a global comparative perspective. We find that wage inequality was comparatively modest during the first half of the twentieth century, but rising much faster during the postwar era than in other industrial countries. In-depth analyses of wage inequality trends in Argentina, Brazil, and Chile confirm this pattern, but also reveal notable country peculiarities. In Argentina and Chile, trend breaks coincided with large political-institutional shocks while in Brazil, wage inequality increased unabated under the wage regulation policies of successive post-war administrations. We argue that without taking national policies with respect to education and the labor market into account, economic theory cannot explain “Latin American” patterns of wage inequality.
Colonial state institutions are widely cited as a root cause of sub-Saharan African underdevelopment, but the opinions differ on the channels of causation. Were African colonial states ruled by near absolutist governments who strived to maximize revenue extraction in order to strengthen their grip on native African societies? Or did European powers build “states without substance”, governed with minimal resources and effort, failing to invest in basic public goods? This paper develops an analytical framework for comparing colonial tax and spending patterns and applies it to eight British African colonies (1880-1940). We show that colonial fiscal systems did not adhere to a uniform logic, that minimalism prevailed in West Africa, extractive features were more pronounced in East Africa, and that Mauritius revealed characteristics of a developmental state already before 1940.
The dramatic decline of Argentina in the world income distribution during the twentieth century poses a major puzzle in the historical growth literature. This exceptional case of divergence is usually interpreted as the result of a failed transition from a successful agrarian export economy into a high-productive industrial economy, but explaining this failure is not that straightforward. We study the development of industrial labour productivity in Argentina in comparison to Australia to obtain more insight into the timing of this failed transition. We estimate that Argentina’s industrial productivity was circa 15 per cent lower than Australia’s on the eve of WWI, and that productivity levels diverged continuously thereafter up to the 1970s, with the exception of the 1940s. Our tentative explanation focuses on the role of political elites serving the oligopoly interests of a handful of well-connected entrepreneurs, in contrast to the deliberate efforts of consecutive Australian governments to promote broad-based industrialisation via targeted fiscal reforms, educational investments and social policies.
Colonial tax systems have shaped state-economy relationships in the formative stages of many present-day nation-states. This article surveys the variety in colonial tax systems across thirty-four dominions, colonies, and protectorates during the heyday of British imperialism (1870-1940), focusing on a comparison of colonial tax levels. The results are assessed on the basis of different views in the literature regarding the function and impact of colonial fiscal regimes: are there clear differences between ‘settler’ and ‘non-settler’ colonies? I show that there is little evidence for the view that ‘excessive taxation’ has been a crucial characteristic of ‘extractive institutions’ in non-settler colonies because local conditions (geographic or institutional) often prevented the establishment of revenue-maximizing tax machineries. This nuances the ‘extractive institutions’ hypothesis and calls for a decomposition of the term ‘extractive institutions’ as such.
Land inequality is one of the crucial underpinnings of long-run persistent wealth and asset inequality. This article assesses the colonial roots of land inequality from a comparative perspective. The evolution of land inequality is analysed in a cross-colonial multivariate regression framework complemented by an in-depth comparative case study of three former British colonies: Malaysia, Sierra Leone, and Zambia. The main conclusion is that the literature tends to overemphasize the role of geography and to underestimate the role of pre-colonial institutions in shaping the colonial political economic context in which land is (re)distributed from natives to colonial settlers.
Inequality estimates derived from household consumption expenditure surveys (Susenas) suggest that economic inequality in Indonesia was comparatively moderate during the rapid economic transition in the Suharto era (1966-1998). Yet the expenditure distribution concept and problems of underreporting and selection bias constrain meaningful international inequality comparisons. This paper reassesses Indonesian inequality from a comparative perspective employing various alternative data sources and indicators. A comparison with Brazil, Mexico, and the US reveals that Indonesian inequality levels are generally closer to Latin American levels than to US levels. Except for large short-term fluctuations, we did not find an overall increasing or decreasing inequality tendency between 1966 and 1998.
The labor income share in national income is a good indicator of the extent to which the working classes are able to reap the fruits of economic growth or, conversely, bear the burden of economic stagnation. This paper aims to reconstruct the labor income share of Argentina, Brazil and Mexico in a three-sector framework, including the rural, the urban formal and the urban informal sectors. We find that in all three countries the share of labor earnings peaked in the middle of the 20th century. Fluctuations in the Brazilian and Mexican labor income shares were large, with a sharp decline in the post-1961 and post-1976 periods, respectively. In Argentina, the labor income shares tended to be more constant at levels around 50 per cent, testifying to a more stable and egalitarian distribution of income.
This paper studies the expansion of mass education in Latin America in the twentieth century from a global comparative perspective. The paper argues that expansion in terms of enrolment and attainment levels was quite impressive. A comparative analysis of the grade enrolment distribution demonstrates, however, that the rapid expansion of primary school enrolment did not correspond with an equally impressive improvement in educational quality. The persistently large tertiary education bias in public education spending suggests that part of the poor quality performance is related to a lack of fiscal support for primary education and that the political economy explanation for educational underdevelopment, as advanced by Engerman, Mariscal and Sokoloff for the 19th century, still applied to Latin America during most of the 20th century.
The present paper introduces a new indicator of educational inequality, the grade distribution ratio (GDR), focusing on levels of grade repetition and drop out rates in primary and secondary education. The indicator is specifically suitable to evaluate the distributive implications of expanding educational systems in developing countries. A comparative analysis of grade enrollment distributions across 92 developing countries from 1960 to 2005 reveals that the decline in educational inequality has been substantial and wide spread since 1960, but that progress has slowed down in the last two decades. Latin American countries were characterized by very large initial levels of educational inequality, but contrary to other developing regions continued to equalize their grade enrollment distribution in the last two decades.
In this contribution we argue that the economic historical research in the Netherlands and Flanders can benefit much more from close cooperation with its colleagues in history departments than it presently does. We corroborate this notion by discussing some recent developments in the ‘Great Divergence’ debate. The extent and impact of economic inequality is one of the prime concerns of our age, and economic historians are particularly well-equipped to play a key role in this debate. We put forward some ideas to remedy the rather disappointing contribution of the ‘Dutch-speaking’ economic historical community which we observe at present.
Globalization without regionalization. Why Latin American and African countries hardly trade with their neighbours?
The present contribution explores the long twentieth-century globalization process from a trade perspective, addressing the question why increasing international trade in the economically advancing regions (Europe, North America, East Asia) was, to a large extent, driven by trade within the region, whereas most Latin American and African countries failed to develop a strong integration of commodity markets in the region. The paper discusses three theoretical conjectures to explain this phenomenon and examines the possible advantages of regionalization for long run economic growth. The main argument of the paper is that, from a trade perspective at least, the process of globalization is often confused with a process of regionalization.