Economic Impact of Colonialism, 1800-1950

Abstract

This paper summarizes the results of a book that examined the theory of the economic impact of colonialism, the economic policies pursued by colonial governments from 1800 to 1950, and the impact of these policies on economic growth, industrialization, literacy rates and stock of human capital in the labor force. Applying econometric techniques to cross-country data in 1950, the study found large negative impacts of colonialism on growth rates of PCI (from 1870-1950), levels of industrialization and several measures of human capital; these measures were shown to be statistically significant and robust to changes in specifications. Moreover, the end of colonialism in the 1950s produced an era of rapid economic growth and rising literacy levels and life expectancy in nearly all the former colonies. In Sub-Saharan Africa the positive growth rates of PCI were reversed for two decades starting in the late 1970s, but in most of the Asian countries went on to join the Middle Income and Countries.

Keywords: Colonialism, Imperialism, Civilizing Mission, De-Industrialization, De-Schooling, Industrialization, Years of Schooling, Human Capital, Literacy, Growth Rates of GDP

JEL Classification: O10, O11, O14, O15, O19, O40, O57