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The erosion of colonial trade linkages after independence

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  • Head, Keith
  • Mayer, Thierry
  • Ries, John

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 find 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.

Suggested Citation

  • Head, Keith & Mayer, Thierry & Ries, John, 2010. "The erosion of colonial trade linkages after independence," Journal of International Economics, Elsevier, vol. 81(1), pages 1-14, May.
  • Handle: RePEc:eee:inecon:v:81:y:2010:i:1:p:1-14
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    More about this item

    Keywords

    Trade Gravity Colonies;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration

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