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The erosion of colonial trade linkages after independence

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  • Keith Head

    (Sauder School of Business [British Columbia])

  • Thierry Mayer

    (Département d'économie)

  • John Ries

    (Sauder School of Business [British Columbia])

Abstract

Most independent nations today were part of empires in 1945. Using bilateral trade data from 1948 to 2006, we examine the effect of independence on post-colonial trade. While there is little short-run effect on trade, after four decades trade with the metropole (colonizer) has contracted by about 65%. Hostile separations lead to large, immediate reductions in trade. We also !nd that trade between former colonies of the same empire erodes as much as trade with the metropole, whereas trade with third countries decreases about 20%. The gradual trade deterioration following independence suggests the depreciation of some form of trading capital.

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Paper provided by Sciences Po in its series Sciences Po publications with number info:hdl:2441/c8dmi8nm4pdjkuc9g8mck8sc1.

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Date of creation: May 2011
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Publication status: Published in Journal of International Economics, 2011, vol. 81, pp.1-14
Handle: RePEc:spo:wpmain:info:hdl:2441/c8dmi8nm4pdjkuc9g8mck8sc1

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