African History through the Lens of Economics: An introduction to African development and history
The Wheeler Institute’s open access online course, African History through the Lens of Economics, recently covered colonisation in three lectures with Elias Papaioannou, Academic Director of the Wheeler Institute for Business and Development, and Leonard Wantchekon, Professor of Politics and International Affairs at Princeton University, supplemented by three special lectures delivered by scholars specialising in different aspects of the continent’s colonial experience.
Sections
- Unpacking colonisation to understand its impact on Africa
- Types of colonial experience and the specific factors that interest economists
- Education and human capital – restricted investments in the face of strong demand
- Transport infrastructure – positive economic effects from investments built by African workers
- Institutions – inclusive and exclusive regimes and their long-run effects
- Decolonisation and early independence – how independence movements shaped post-independence politics
- Conclusion – unpacking a complex phenomenon and identifying causation
At the beginning of the colonial era in the mid-1880s, after the periods of the slave trade and the Scramble for Africa, the average person’s income in sub-Saharan Africa was one third of the figure in the U.S.; by the time of independence in the 1950s and 1960s, this had fallen to one tenth or even one twentieth of the level of the average American. Why was the colonial period so deleterious for the wellbeing of Africans? Was it caused by under-investment in health and education, extractive economic and political regimes, or by specific cultural and geographic factors? Did investments in physical infrastructure and Christian missions help or hinder African development? How do these colonial era practices and the nature of a country’s independence movement affect economic performance today? These were some of the questions that the Wheeler Institute team set out to explore in the three weeks devoted to colonisation.
Unpacking colonisation to understand its impact on Africa
While earlier lectures in the series had considered the impacts of the slave trade and the Scramble on long-run economic development on the continent, these three lectures looked specifically at colonisation and decolonisation, focusing on transportation infrastructure investments (roads and railways), institutions and state capacity, and human capital development. As in the rest of the series, a key motivation was to explain how economists unbundle larger phenomena to identify possible causal relationships and understand the heterogeneity of impacts, and how they are making use of new data sets, whether constructed from existing archival material or gathered more recently using modern techniques from geospatial, luminosity and survey data.
Types of colonial experience and the specific factors that interest economists
Professor Papaioannou began the first lecture by outlining the motivation for an extended focus on the colonial period and providing an overview of some of the specific challenges facing economists working on these questions. It is particularly difficult to answer why colonisation was so detrimental to Africa because there are no obvious counterfactuals – all the continent was affected by the practice, whether directly or through spillover effects, over an extended period of time.
One of the first approaches therefore is to classify different colonial regimes to facilitate comparisons between them. Various categorisations have been proposed, based on the colonial power, their objectives and intentions, the economic basis of the colonial institutions, their legal status or political structure. One of the most well-known of these is the distinction between extractive and inclusive institutions of Acemoglu, Johnson and Robinson (AER 2001, QJE 2002), who used it as the starting point for a hypothesis that identified a persistent connection between the nature of those colonial institutions, the early post-independence and contemporary institutions, and the country’s subsequent economic development, with extractive colonial regimes leading to lower contemporary development. In their argument, one plausible fundamental explanation of why such regimes were extractive or inclusive relates to settler mortality, with high mortality rates correlating with extractive colonial regimes and later with weak contemporary institutions.
Such hypotheses are broad and controversial, and they are hard to prove. Economists now therefore more commonly seek to break down colonial experience into specific aspects– infrastructure, human capital investments, economic structure, political and economic institutions, border and country design, and psychology – and to identify quasi-random variations that can shed light on causation in each of these areas. They also seek to investigate the heterogeneity that underlies the aggregate effects, for example inequality in terms of place, religion, ethnicity, and city or rural location. This approach can operate at meso and micro levels, using geospatial, individual and narrative data sets, some of which were covered in Tanner Regan’s earlier lecture.
Education and human capital – restricted investments in the face of strong demand
Professor Wantchekon then looked in detail at one of these aspects – the impact of colonisation on education and human capital. He began by providing an overview of the main patterns in the data, which are that there were significant educational disparities by region and gender and that the curricula were focused on primary school education of male children.
Three important trends emerged from the lecture. First, the investments by colonial powers in education were small and they tended to concentrate in areas with existing demand, leading to unequal coverage within countries, but they did have important effects on social mobility and engagement. Second, Africans demanded more European education and used it to develop links with the African diaspora and civil rights movements that shaped the thinking of nationalist leaders in the inter-war period. Third, the colonial powers feared education, with the result that while primary education was scarce, secondary education was almost non-existent (in 1939, for example, there was no secondary school in Central Africa), the level of enrolment of girls was much lower than that of boys, and the curriculum was focused on labour-related activities, such as metal working, woodworking, and agriculture, particularly in rural areas.
Economic research in this area has looked at the impact of education of socio-economic mobility, the inequality of provision, and the empowerment of the African intelligentsia and political elite. For example, Wantchekon et al. (2015) showed that people living near a school had better standards of living and social networks, that they were less likely to be farmers and that this effect persists through to a second generation. Ricart-Huguet (2021) has shown that political inequality, measured by the representation in government of regions or groups, can be derived from colonial educational provision.
It is important that those who had gained from education and were in power after independence enacted policies to break from colonial practices, and Professor Wantchekon cited the example of Obafemi Awolowo in Nigeria, who pioneered free primary education in 1952, benefitting 50% of children aged between 6 and 12 and raising the participation rate of girls from 20% in 1954 to 40% in 1966.
Christian missions – political participation, birth rates and trust
The first special lecture provided a deep dive into the impact of Christian missions on education, health and gender. Etienne Le Rossignol, Research Fellow at London Business School, presented On the Legacy of Christian Missions, which reviewed recent work on how missions affected contemporary religious belief, educational outcomes and political participation. There is, for example, a robust correlation between exposure to Protestant missionaries and democracy, with missions catalysing mass education and encouraging the printing of newspapers, leading to greater political participation. Another interesting finding is that more exposure to missions reduced in-group bias among people in Katanga.
Catherine Guirkinger, Professor of Economics in the Center for Research in Economic Development, University of Namur, then presented Pro-Birth Policies, Missions and Fertility: Historical Evidence from Congo. This paper looked at the effects of missionary activity on women and whether these effects were persistent, focusing in particular on the Congo, where Catholic missions were mobilised by the Belgian state to increase birth rates and ensure the maintenance of the labour force. By looking at individual health records and demographic survey data, she concludes that Catholic missions were able to increase birth rates, by implementing health programmes for birth and childcare, discouraging post-partum abstinence and modifying breastfeeding practices, but that Protestant missions, which had different educational priorities and offered greater opportunities for girls to work, had the opposite effect. Finally, Dozie Okoye, Associate Professor of Economics, Dalhousie University, presented Things Fall Apart – Missions, Institutions and Trust. This paper investigated whether missions introduced new beliefs and norms to traditional social structures and therefore undermined trust in traditional practices and community norms or whether trust increased through education and acculturation. Using Afrobarometer survey data, he concludes that in countries that experienced indirect rule, there is a negative relationship between exposure to missions and trust in relatives, neighbours, members of the same ethnic groups and other individuals, but not in colonial era institutions themselves. In other words, there is some validity to Achebe’s claim that the clan fell apart in the face of missionary activity.
Transport infrastructure – positive economic effects from investments built by African workers
In the first part of the second main lecture, Professor Papaioannou considered the impact of colonial era investments on the continent. Again, the challenges facing economists in unbundling the effects of a specific policy and establishing causal relationships are significant. In the case of infrastructure investment, for example, policies were strategic –railroads were not built in random locations –connecting big cities, mineral rich areas and ports, and those areas that did receive such investments may also have seen other schools and public infrastructure built to support them, blurring the impact of the investments themselves. As mentioned in an earlier lecture in the series by Tanner Regan, historical data for the period is noisy and measurement error often takes unusual forms, for example where information is available only for activities with European agents.
A common argument around infrastructure investment is that it had a positive or benign effect, driving capital accumulation and industrialisation. This idea, known as the ‘Big Push’ to jump start development, was shared across the political spectrum, for example by Cecil Rhodes and Lenin, and was first investigated in Rosenstein-Rodan (1943). An immediate observation is that even if this argument holds, the aggregate effect on African development is not large, as the total number of these investments was limited. For example, in Mozambique there were only four railways and these connected agriculturally rich areas with ports rather than connecting the economic hubs themselves and stimulating industrialisation; in Ghana, there were two railroads, one for the export of gold and another for other cash crops.
Nonetheless, research, including that by Kerby, Jedwab and Moradi (2017), has sought to investigate the impact on economic activity in the vicinity of the railroads and the persistence of these effects. Overall, we see sizeable local effects, with a clustering of economic activity near the railway, leading to urban development and increases in manufacturing and services. In Ghana, for example, in those places closer to the railway, even in 2000 there was a higher level of agricultural (cocoa) production and denser activity, with associated productivity gains; similar patterns were observable in Kenya and Ethiopia. Of course, before concluding that these investments were positive for the areas that received them, it must be remembered that many railroads were built with prison or forced labour, the costs of which practices may outweigh the benefits of the investment.
Some novel approaches to advancing on causation have recently been developed, including looking at plausible counterfactuals represented by lines which were planned in detail but for various reasons not built. In this case, it is possible to compare outcomes for individuals close to actual railways with those of individuals close to planned but unbuilt railways.
Railroads in Nigeria – placebo lines and regional heterogeneity
In the special lecture, Roland Pongou, Associate Professor of Economics at the University of Ottawa, presented a paper, New Technology, Better Economy? The Heterogeneous Impact of Colonial Railroads in Nigeria, which demonstrated this new technique, alongside other methodologies assessing state fixed effects and using instrumental variables.
The research uses individual and household data gathered through the Demographic and Health Surveys, transportation infrastructure, and historical information on mission stations, cities and urban populations to look at the economic effects of proximity to railways on education, wealth, and urbanisation in Nigeria. The authors find that on average proximity to railways has a significant positive impact on local development, but that this is concentrated in the north of the country where no viable transportation alternative pre-existed the construction of the railways and is absent in the south where transportation by waterways was already well established.
Prison labour – an important and pro-cyclical contributor to colonial activities
In the second part of the special lecture, Belinda Archibong, Assistant Professor at Barnard College, Columbia University, presented her paper, jointly written with Nonso Obikili, on Prison Labour: The Price of Prisons and the Lasting Effects of Incarceration. She pointed out that in the debate about the economic impact of railroads and missionary schools, it is often forgotten that African forced labour was used to build these institutions. The paper investigated how important prison labour was for colonial public works, how incarceration rates responded to economic shocks and what the long-term effects of these practices were for perceptions of state legitimacy. Focusing again on Nigeria, where the incarceration rate has fallen tenfold from 1940 to the current day, and looking at historical information in the colonial era Blue Books, estimates of contemporary wage costs and Afrobarometer data, the paper concludes that prison labour was important throughout the colonial period, being net positive to the state in most years even when considering the costs of incarceration. Furthermore, it identifies that during the positive economic shocks, for example higher export cash crop prices or better rainfall, incarceration and prison labour rates increased, perhaps due to a reduced willingness in the wider pubic to work for the public sector and perhaps due to more stringent sentencing by magistrates. Finally, respondents from areas with higher rates of colonial imprisonment still report lower trust in institutions like the police and government, without an effect on interpersonal trust. These conclusions are interesting in themselves and in regard to current debates about the possible use of prison labour today.
Institutions – inclusive and exclusive regimes and their long-run effects
The second part of Professor Papaioannou’s lecture considered institutional structures. It is generally agreed that colonial era institutions were predominantly extractive in nature, despite a range of institutional forms from direct rule through chiefs or administrators, indirect rule through existing structures or newly appointed chiefs, and private concessions. The labour arrangements supporting these institutions were also extractive, encompassing forced labour, peasant economies with monopsonists, and large plantations. The influential thesis of Acemoglu, Johnson and Robinson is that these extractive colonial institutions of political power led to extractive post-independence institutions that in turn led to underdevelopment.
Professor Papaioannou then compared two countries from this perspective: Botswana and Sierra Leone. On the one hand, Botswana represents a significant exception from the general trend of sub-Saharan Africa, having seen a fourteen-fold increase in PPP GDP per capita between 1960 and 2010 and having the highest GDP per capita in mainland Africa, after a peaceful post-independence period marked by efficient use of natural resource endowments, notably in diamonds. Two factors in Botswana’s colonial experience stand out: first, the strong precolonial political institutions, including the Kgotla assembly of adult males and a tradition of private ownership of cattle; second, the light colonial era regime, which saw the persistence of Tswana chiefs and institutions after a successful petition by Dikgosi chiefs to Queen Victoria. On the other hand, Sierra Leone has one of the lowest levels of GDP per capita in Africa, has seen little growth post-independence and has experienced decades-long civil conflicts, despite having a more favourable coastal location than Botswana, albeit one that also caused it to be more affected by the slave trade. Here, the British appointed paramount chiefs to rule the interior of the country; Acemoglu, Johnson and Robinson traced the descendants of the paramount and local chiefs to present times and concluded that where in colonial times there were more chiefs, there is more intense present day political competition and more conflict.
As a concluding example, Professor Papaioannou turned to the Congo, where King Leopold’s brutal rule, documented in Adam Hochschild’s King Leopold’s Ghost and Conrad’s Heart of Darkness, seems to presage the dysfunctional regimes of Mobutu and the Kabilas. He cited the research of Sarah Lowes and Eduardo Montero (2021) which measured the impact of two notorious concessionary companies in the north of the country and showed that even one hundred years later education and wealth are different inside and outside the boundaries. What is interesting, and supportive of the thesis of institutional persistence, is that inside the boundaries, the chiefs’ despotic rule and the under-provision of public goods and health were persistent.
Local governance and tax capacity – further heterogeneity in structure and effects
In the third special lecture, Jutta Bolt, Professor of Global Economic History at the University of Groningen, introduced her recent work on local institutions, or native authority systems. Such institutions are interesting, because they operated as the link between the majority of the African populations and the small European institutions, and because of the wide range of indigenous institutions that existed prior to colonial conquest, from the heavily centralised to the horizontal. What emerged strongly from her detailed research into eleven former British colonies was the heterogeneity of native authority institutions: while the majority contained a council, only 20% contained a solo chief. In other words, contrary to common perception, indirect rule did not require homogeneity or despotic rule. The research shows persistence between pre-colonial arrangements and the colonial era institutions adopted. Also interesting were findings that, controlling for other factors, administrations with a solo chief spent more on administration and less on public goods that those with a council.
Leigh Gardner, Associate Professor of Economic History, London School of Economics, then spoke on Taxation and local government in Africa, which also considered the influence of local governments under colonial administrations. Motivated by Rudolf Goldscheid’s statement that ‘the budget is the skeleton of the state, stripped of all ideologies,’ the paper looked at the level of tax revenues across former British colonies, as well as their structure and distributional effects. In general, local taxes have been neglected by researchers in favour of colonial finances, primarily due to a lack of regular and consistently formatted evidence, despite their often being the mirror image of colonial administration, providing insights into the power and expectations of local governments. In 1929 and 1939, for example, it was after regular complaints from African taxpayers about how their contributions were being spent that the UK Government passed the Colonial Development and the Colonial Development and Welfare Acts, which made available to colonial administrations funds for development projects. Again, the heterogeneity of impact is worthy of note, with native authority administrations divided into organised and unorganised, and the former given greater resources to provide public goods.
Decolonisation and early independence – how independence movements shaped post-independence politics
The third main lecture, Anti-Colonial Resistance: Motivation, Nature and Impact with Professor Wantchekon, considered decolonisation and early independence, looking at the demands, organisations and strategies of anti-colonial movements, the colonial responses, and the post-colonial impacts.
The 1950s saw the emergence of two prominent schools of thought: on the one hand, Western European-style socialists, such as Nkrumah and Nyerere, advocates of non-violence and sympathetic to market economics; on the other, more radical Marxists, including Fanon and Ruben Um Nyobè, advocating more violent methods. Geography was an important factor in whether resistance movements took the form of rural insurgencies or urban protest movements, as demonstrated by the different methods followed by Amílcar Cabral in Guinea-Bissau and Cape Verde, and the type of movement was important in determining both post-independence political practices and the response of the colonial powers, which often engaged in violent repression of rural insurgencies that in turn reduced levels of trust in institutions. Examples of the different responses can be seen in Madagascar and Cameroon, where long armed struggles occurred, and in Cote d’Ivoire and Ghana, where election results were falsified and leaders imprisoned.
Professor Wantchekon considered two papers written with Omar García-Ponce, the first on democratic outcomes and the second on the long-term effects of colonial repression on political attitudes. Mapping independence movements against Polity IV and Freedom House datasets on democracy, the former concluded that democratic culture in Africa today can be traced back to the legacy of a country’s independence movements, with rural anti-colonial insurgencies leading to autocratic or unstable democracies and urban protest movements leading to more stable democracies; that conflicts over land or resources negatively affect democracy; and that one potential channel explaining these outcomes is the strengthening of civil liberties, such as free expression, and the proliferation of non-hierarchical organisational structures, prior to independence. The second paper, which worked with Afrobarometer survey responses, found that past violence induces a change in behaviour and more frequent self-censoring.
Conclusion – unpacking a complex phenomenon and identifying causation
Across the three main and three supplementary lectures, the Wheeler Institute team showed how a complex phenomenon like colonisation can be unbundled into separate components – human capital investments, infrastructure projects, labour practices, political structures and institutions, and independence movements – and how these components can be subjected to testing to understand their causal relationships with observable differences in Africa today. Through increasingly inventive research using social and political records and modern datasets, economists are generating a fuller understanding of historical events, economic development and current realities.
African History through the Lens of Economics is an open-access, interdisciplinary lecture series to study the impact of Africa’s history on contemporary development by the Wheeler Institute for Business and Development. This course is led by Elias Papaioannou (London Business School), Leonard Wantchekon (Princeton University), Stelios Michalopoulos (Brown University), and Nathan Nunn (Harvard University and supported by CEPR, STEG and the European Research Council. The course runs from February 1 to April 13 of 2022 and has received more than 27.000 registrations. For more information visit the course website.
David Jones (MBA 2022) is a Classics graduate and has worked as a teacher in Malawi, an accountant at Deloitte and in the finance function at the Science Museum in London. He completed an internship with the Wheeler Institute’s Development Impact Platform in Zambia over summer 2021 and is now continuing as an intern for the Wheeler Institute, contributing to the creation of content that amplifies the role of business in improving lives