DP1444 | Did Colonization Matter for Growth? An Empirical Exploration into the Historical Causes of Africa's Underdevelopment

Publication Date

30/09/1996

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Abstract

This paper investigates the impact of twentieth-century European colonization on African countries. We find that colonization mattered for growth. The following had some beneficial growth effects: being a dependency rather than a colony; being a colony of France or the United Kingdom rather than Belgium, Italy or Portugal; and being less exploited. On average, growth accelerates after independence. Variables proxying for colonial heritage add explanatory power to standard growth regressions, while indicators for human capital and political and ethnic instability lose significance. The coefficient of a dummy for sub-Saharan Africa becomes less significant in a cross section of 98 countries after controlling for colonial experience.