An Update of Nunn’s “Slave Trades”

Recent studies on African economic history have emphasized the structural impediments to African growth, such as adverse geographical conditions and extractive colonial institutions. The evidence is mainly drawn from cross-country regressions on late 20th century income levels, assuming persistent effects of historical causes over time. But to which extent has African poverty been a persistent phenomenon? Our study sheds light on this question by providing new evidence on long-term African growth-trajectories. We show that slave trade regressions are not robust for pre-1970s GDP per capita levels, or for pre-1973 and post-1995 growth rates. We calculate urban unskilled real wages of African workers in nine British African countries 1880-1965, adopting Allen’s (2009) subsistence basket methodology. We find that real wages were above subsistence level, rose significantly over time and were, in major parts of British Africa, considerably higher than real wages in Asian cities up to, at least the 1930s. We explain the intra-African variation in real wage levels by varying colonial institutions concerning land alienation, taxation and immigration.

….slave export intensity is highly and significantly (at the 1% level) correlated to GDP per capita in 2000, but not to income levels in 1950 or 1960. In 1970 the effect is significant at the 10% level, but the coefficient is much smaller than in 2000. Column 4 to 6 shows the regression on growth rates including initial GDP per capita (ln). A regression of slave exports on per capita GDP growth is only statistically significant for the period 1973-1995, which explains why the regression on GDP per capita in 2000 is so robust. However, for the periods 1950- 1973 or 1995-2008 the correlation is insignificant and after 1995 the coefficient turns positive. Hence, the claim that Africa’s slave trades affect current economic performance is multi-interpretable.

That is Northwestern’s Marlous van Waijenberg and Utrecht’s Ewout Frankema in an interesting paper on the issue of structural impediments to economic growth in Africa.

I also found this paragraph interesting:

The welfare ratios of urban unskilled workers in pre-modern London and Amsterdam were obviously higher than in late nineteenth century British Africa. However, the average annual growth rates in Accra between 1880 and 1965 (1.17%) were comparable to the average growth rates in London (1.14%, 1840-1900). Welfare growth rates in some other countries were even higher, although it has to be said that these growth rates were affected by very low starting points. In Mauritius we observed the highest long-term growth rate (1.58%), which suggests that the Mauritian ‘Miracle’ is not just a post-colonial phenomenon.31 In sum, we find little evidence that suggests that four generations of African urban wage workers in the colonial period were trapped into persistent poverty. Welfare improvements were certainly not confined to very specific regions in British Africa or brief periods of time (such as 1945-1960). In fact, the whole idea that Africa has been the poorest and most slowly growing region since the Industrial Revolution is based on a backward extrapolation of post-1960 growth experiences without a historical empirical foundation.

The paper is not about the Nunn thesis per se, but investigates more generally whether historical moments (like the slave trade period) produced structural impediments that have made Africa perennially the slowest growing region of the world (hence the need for explaining the “Africa” dummy in popular research and thought).

I wish development economists read more history, especially economic history.

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