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Root Causes of African Underdevelopment

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  • Sambit Bhattacharyya

    (RMIT University, Melbourne, Australia)

Abstract

What is the root cause of Africa’s current state of under-development? Is it the long history of slave trade, or the legacy of extractive colonial institutions, or the fallout of malaria? A precise answer still eludes us. This paper investigates the relative contribution of these historical factors using an instrumental variable approach. The results show that malaria matters the most and all other factors are statistically insignificant. The mechanism through which malaria impacts economic performance is demonstrated by a strong negative relationship between malaria and national savings and a two period overlapping generation model. The model shows that high malaria incidence adversely affects growth by increasing both mortality and morbidity. Increased mortality from malaria induces households to increase current consumption and save less for the future. Increased morbidity on the other hand adversely affects labour productivity. The combined impact of these two effects is a slowdown of capital accumulation and economic growth.

Suggested Citation

  • Sambit Bhattacharyya, 2007. "Root Causes of African Underdevelopment," Working Papers in Economics and Development Studies (WoPEDS) 200704, Department of Economics, Padjadjaran University, revised Apr 2007.
    • Handle: RePEc:unp:wpaper:200704
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    More about this item

    Keywords

    Malaria; Colonial Institutions; Slave Trade; Economic Development;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • N0 - Economic History - - General

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