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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.

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Bibliographic Info

Paper provided by Department of Economics, Padjadjaran University in its series Working Papers in Economics and Development Studies (WoPEDS) with number 200704.

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Length: 32 pages
Date of creation: Apr 2007
Date of revision: Apr 2007
Handle: RePEc:unp:wpaper:200704

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Keywords: Malaria; Colonial Institutions; Slave Trade; Economic Development;

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Citations

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Cited by:
  1. Augustin Kwasi Fosu, 2013. "Growth of African Economies: Productivity, Policy Syndromes and the Importance of Institutions," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 22(4), pages 523-551, August.
  2. Graziella Bertocchi & Andrea Guerzoni, 2010. "Growth, History, or Institutions? What Explains State Fragility in Sub-Saharan Africa," Department of Economics 0625, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
  3. Nathan Nunn, 2008. "The Long-Term Effects of Africa's Slave Trades," The Quarterly Journal of Economics, MIT Press, vol. 123(1), pages 139-176, 02.
  4. Sanghamitra Bandyopadhyay & Elliott D. Green, 2010. "The reversal of fortune thesis reconsidered," LSE Research Online Documents on Economics 41260, London School of Economics and Political Science, LSE Library.
  5. Sambit Bhattacharyya, 2008. "Trade Liberalization And Institutional Development," Departmental Working Papers 2008-13, The Australian National University, Arndt-Corden Department of Economics.
  6. Rodolfo E. Manuelli, 2011. "Disease and Development: The Role of Human Capital," 2011 Meeting Papers 605, Society for Economic Dynamics.
  7. Gabriel Picone & Robyn Kibler & Benedicte Apouey, 2013. "Individuals’ Preventive Behavioral Response to Changes in Malaria Risks and Government Interventions: Evidence from six African countries," Working Papers 0313, University of South Florida, Department of Economics.
  8. Thomas K.J. McDermott, 2013. "Reconciling conflicting evidence on the origins of comparative development: A finite mixture model approach," Grantham Research Institute on Climate Change and the Environment Working Papers 130, Grantham Research Institute on Climate Change and the Environment.
  9. Margherita Bottero & Björn Wallace, 2013. "Is There a Long-Term Effect of Africa's Slave Trades?," Quaderni di storia economica (Economic History Working Papers) 30, Bank of Italy, Economic Research and International Relations Area.
  10. Rodolfo Manuelli, 2011. "Disease and Development: The Role of Human Capital," Working Papers 2011-008, Human Capital and Economic Opportunity Working Group.
  11. Fabrizio Carmignani & Abdur Chowdhury, 2011. "The Development Effects Of Natural Resources: A Geographical Dimension," William Davidson Institute Working Papers Series wp1022, William Davidson Institute at the University of Michigan.

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