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The Long-Term Effects of Extractive Institutions: Evidence from Trade Policies in Colonial French Africa

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  • Federico Tadei

Abstract

Despite having convincingly linked colonial extractive institutions to African current poverty, the literature remains unclear about which exact institutions are to blame. To address this research question, in this paper I identify trade policies as one of the main components of colonial extraction by showing their long-term effects on African economic growth. By using the gap between prices paid to African producers in the French colonies and competitive prices as a measure of rent extraction via trade monopsonies, I find a negative correlation between such price gaps and current development. This correlation is not driven by differences in geographic characteristics or national institutions. Moreover, it cannot be explained by the selection of initially poorer places into higher colonial extraction. The evidence suggests that trade monopsonies affected subsequent growth by reducing development in rural areas and that these effects persisted for a long time after independence.

Suggested Citation

  • Federico Tadei, 2018. "The Long-Term Effects of Extractive Institutions: Evidence from Trade Policies in Colonial French Africa," Economic History of Developing Regions, Taylor & Francis Journals, vol. 33(3), pages 183-208, September.
    • Handle: RePEc:taf:rehdxx:v:33:y:2018:i:3:p:183-208
    DOI: 10.1080/20780389.2018.1527685
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    Cited by:

    1. Aslanidis, Nektarios & Martínez Ibáñez, Oscar & Tadei, Federico, 2020. "The Integration of West Africa in the Global Economy, 1842-1938," Working Papers 2072/417678, Universitat Rovira i Virgili, Department of Economics.
    2. Ali, Merima & Fjeldstad, Odd‐Helge & Shifa, Abdulaziz B., 2020. "European colonization and the corruption of local elites: The case of chiefs in Africa," Journal of Economic Behavior & Organization, Elsevier, vol. 179(C), pages 80-100.
    3. Cappelli, Gabriele & Baten, Joerg, 2021. "Numeracy development in Africa: New evidence from a long-term perspective (1730–1970)," Journal of Development Economics, Elsevier, vol. 150(C).
    4. Winnie Fung & Lenis Saweda O. Liverpool‐Tasie & Nicole M. Mason & Ruth Uwaifo Oyelere, 2020. "Do crop purchase programs improve smallholder welfare? The case of Zambia's Food Reserve Agency," Agricultural Economics, International Association of Agricultural Economists, vol. 51(4), pages 519-533, July.
    5. Vanessa Echeverri & Juan C. Duque & Daniel E. Restrepo, 2021. "Identifying poverty traps based on the network structure of economic output," Papers 2108.05488, arXiv.org, revised Aug 2021.

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