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Root Causes of African Underdevelopment

  • Sambit Bhattacharyya

What are the root causes 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? We investigate the relative contributions of these factors using an instrumental variable approach. The results show that malaria matters the most and all other factors are statistically insignificant. Malaria also negatively affects savings. Using a two period overlapping generation model we show that malaria impacts economic performance by increasing both mortality and morbidity. Increased mortality increases current household consumption and discourages savings. Increased morbidity adversely affects labour productivity. The combined impact is a slowdown of capital accumulation and economic growth.

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File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp2008/wp_econ_2008_16.pdf
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Paper provided by The Australian National University, Arndt-Corden Department of Economics in its series Departmental Working Papers with number 2008-16.

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Length: 35 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:pas:papers:2008-16
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