Colonial Migration and the Origins of Governance: Theory and Evidence from Java

Abstract

The social exclusion of trading minorities is common across post-colonial states. This paper uses demographic data from the 1930 Census of the Netherlands Indies to study the long term effects of the social exclusion of trading minorities in Java on contemporary economic governance. I show that Javanese districts that were densely settled by Chinese migrants in 1930 have more cooperative business-government relations today. To clarify the importance of social exclusion rather than other factors that may differentiate colonial districts with large Chinese populations, I exploit variation in the settlement patterns of Chinese and Arab trading minorities in Java, which played comparable roles in the island’s colonial economy but faced different degrees of social exclusion. These findings contribute to recent work on the colonial origins of development, ethnicity and informal institutions, and the historical origins of democratic performance.

Keywords: governance, colonialism, migration, Indonesia