'How Does Colonial Origin Matter for Economic Performance in Sub-Saharan Africa'

37 Pages Posted: 10 Mar 2010 Last revised: 14 Nov 2013

See all articles by Johannes Wolfgang Fedderke

Johannes Wolfgang Fedderke

University of Cape Town (UCT)

Nicola Viegi

University of Pretoria - Department of Economics

Julius Agbor

University of Cape Town (UCT)

Date Written: August 4, 2010

Abstract

This paper carefully investigates some of the existing hypothesis regarding the transmission of different colonial legacies to modern day economic performance in sub-Saharan Africa (SSA). It focuses on four key channels of transmission namely, human capital, trade openness, market distortion and initial endowments (or selection bias). The methodology applied in the paper is slightly different to that of previous studies, where only initial conditions at independence were held to influence the subsequent growth path. In contrast, the study combines the pre-colonisation initial conditions, the initial conditions at independence and the subsequent post colonial changes in explaining income differences amongst former SSA colonies. The results suggest that former British colonies have had marginally higher income levels than former French colonies during 1960-2000, and this is attributable to the legacy of British colonisation in trade openness and human capital. We do not find robust evidence in support of the initial endowments and market distortion hypotheses. This evidence challenges the conventional wisdom that differences in initial endowments are largely responsible for the differential path of development in SSA. Furthermore, besides highlighting the importance of the trade openness channel, the study is also the first, to the best of our knowledge, to simultaneously examine a range of feasible transmission channels between colonial origin and economic growth performance.

Keywords: Colonial Origin, Human Capital, Initial Endowments, Institutions, Hausman-Taylor, Sub-Saharan Africa

JEL Classification: F54, O47, I20, N17

Suggested Citation

Fedderke, Johannes Wolfgang and Viegi, Nicola and Agbor, Julius, 'How Does Colonial Origin Matter for Economic Performance in Sub-Saharan Africa' (August 4, 2010). Available at SSRN: https://ssrn.com/abstract=1527355 or http://dx.doi.org/10.2139/ssrn.1527355

Johannes Wolfgang Fedderke

University of Cape Town (UCT) ( email )

Private Bag X3
Rondebosch, Western Cape 7701
South Africa

Nicola Viegi

University of Pretoria - Department of Economics ( email )

Pretoria 0002
South Africa

HOME PAGE: http://www.nviegi.net

Julius Agbor (Contact Author)

University of Cape Town (UCT) ( email )

Private bag Rondesbosch
Rondebosch
CapeTown, Western Cape 7701
South Africa

HOME PAGE: http://www.uct.ac.za

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