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Why is Africa poor?

ACEMOGLU, DARON, ROBINSON, JAMES (2010) Why is Africa poor?, Economic History of Developing Regions, 25 (1):21-50.

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Why is Africa poor?

AIMS

Explain why African institutions take such a shape not conducive to development

Explain when and why African institutions diverged from the rest of the world (particularly Europe)

The fact that institutions matter for development is taken for granted (Acemoglu and Robinson, 2001, 2002, 2005); geographic and cultural explanations also left aside

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Why is Africa poor?

CONCLUSIONS
African

poverty is the result of institutions, which do not provide incentives for politicians to deliver public goods and citizens to save and invest
And

why African institutions are like that?


i.

State formation in Africa took place later with respect to Eurasia. Technological backwardness also relevant. State institutions were born absolutist and patrimonial External shocks (slave trade and colonialism) did not correct this and instead reinforced it

ii. iii.

iv.

Independence made things even worse by strengthening authoritarianism

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Why is Africa poor?

METHODOLOGY

Discussion of historical evidence (case studies):


i.

Technological backwardness: non-adoption of wheel and plow


Late state formation: Kuba kingdom in Congo, 17th century Absolutist and patrimonial states: Ethiopia (longue dure) Slavery: Slave Coast, Asante kingdom in 18th 19th centuries Colonialism: dual economy in South Africa, early 20th century; extractive institutions in Ghana, 19th century Independence: Sierra Leone vs. Botswana

ii. iii. iv.

v.

vi.

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Why is Africa poor?

DISCUSSION & EVIDENCES

On technological backwardness:
Conventional explanations:
Draught animals not available due to tse-tse fly made wheeled transportation uneconomical (McPhee, 1926) African soils not suitable for plow

Building roads not economical because of the forest (Hopkins, 1973)

Wheel not adopted in spite of:


Wheeled transportation cheaper than human porterage

Asante Empire built extensive system of roads


Hand carts could also be used where animals not available (tsetse fly) etiope@gmail.com @africanstates

Why is Africa poor?

DISCUSSION & EVIDENCES

On technological backwardness:
An explanation is lacking, though some hints:
Farmers in Kongo kingdom (17th century) reluctant to adopt better technology due to insecurity in property and human rights Kongolese moved their villages far away from roads to avoid extraction, enslaving and violence from army and slave-traders

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Why is Africa poor?

DISCUSSION & EVIDENCES

On late state formation:


As illustrated by the Kuba state (17th century):
Different communities (Bushong and Lele) showing different degrees of development Origin in transition in Bushong community from stateless society to a pyramid of political institutions and bureaucracy Social reorganization from above made surplus available Political centralization established by king Shayaam made approppriation of surplus through taxation possible No explanation for why Shayaam desired and succeeded in undertaking political transition

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Why is Africa poor?

DISCUSSION & EVIDENCES

On absolutism & patrimonialism:

Absolutism associated to predation of property rights or structurating them to create rents


Strategy of rule patrimonial (Weber): the state is associated with the ruler and no distinction between rulers and states Illustrated by Ethiopia (from 400 BC to Haile Selassie):
Institution of gult: grant of land from Emperor in exchange of (military) services. Allows gult-holder to extract around of income of farmers. No representative institutions or checks in Ethiopian history

Consequence: insecurity of property rights

Absolutist institutions create conflicts over rents at the center which can destroy the state
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Why is Africa poor?

DISCUSSION & EVIDENCES

On the impact of slavery:

Africa the source of slaves well before (1000 years) the Atlantic trade
Slave trade led to intensification of warfare and consolidation of states devoted to slave exportation (Kongo, Oyo, Dahomey, Asante) Demographic impact made population decline by Impact also causing lawlessness and arbitrariety Impacts in society and institutions continued after abolition of slave trade through legitimate commerce: large plantations of agricultural products for exportation cultivated by slaves Slavery persistent well into the 20th century
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Why is Africa poor?

DISCUSSION & EVIDENCES

On the impact of colonialism:

Africa trapped in dual economies built by colonial authorities


Dual economy: co-existence of modern, urban, industrial, technical sector, with traditional, rural, agricultural. Communal ownership of land particularly relevant (Lewis, 1954)

Southern Africa, with large settler communities, the extreme case of extractive colonial institutions causing the underdevelopment of African communities
Case: Introduction of private property of land in Transkei until 1913, and Native Act converting Africans into cheap labor for mining sector

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Why is Africa poor?

DISCUSSION & EVIDENCES

On the impact of colonialism:

Ghanaian Cocoa Farmers: an example of the colonial state discouraging indigenous capitalist activity
Boom in cocoa in late 18th century led to land being sold by traditional chiefs to families

No help of any sort from British authorities; cocoa farmers even built their own roads to reach Accra
British government responded by setting the Cocoa Marketing Board, a compulsory monopsony which payed farmers well below world prices

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Why is Africa poor?

DISCUSSION & EVIDENCES

On the impact of independence:

After independence: a Neopatrimonial political equilibrium


Sierra Leone: president in 1967 more interested in controlling Mendeland that in economic development. He closed the railway line which allowed exportation of Mende crops.

Also, set up a Marketing Board oriented towards extraction; over-valued exchange rate in order to create artificial resources to be distributed among supporters
Polarization in African countries (Esteban and Ray, 1994) made politics a winner takes all game, leading to instability and conflict

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Why is Africa poor?

DISCUSSION & EVIDENCES

On the impact of independence:

Botswana the opposite case


Pre-colonial: long process of state and institution formation around Twsana states Colonial: tradititional institutions conducive to development persisted Independence: limited regionalism of Tswana states facilitated integrative national identity; also, elites linked to ranching (and thus property rights) represented in governments.

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