Population Increase, Extralegal Appropriation, and the End of Colonialism

18 Pages Posted: 25 Aug 2000 Last revised: 20 Jun 2001

See all articles by Murat Iyigun

Murat Iyigun

University of Colorado at Boulder - Department of Economics; Harvard University - Center for International Development (CID); IZA Institute of Labor Economics

Herschel I. Grossman

Deceased

Date Written: October 1993

Abstract

Between 1946 and 1976, the European powers granted independence to all of their large colonies in Africa and Southeast Asia. This paper attempts to provide an economic explanation for this remarkable ending to the era of colonialism. The main theoretical innovation is to consider the effect of population increase on the allocation of time by the indigenous population between productive and subversive activities. The analysis suggests that the increase in population during the colonial period increased the potential return to extralegal appropriation of the profits of colonial companies until the colonies became a net burden on the metropolitan governments. The analysis also suggests that there was less subversive activity in colonies in which the market for indigenous labor was monopsonized because monopsonistic employers internalized the potential negative effect of extralegal appropriation on net profits.

Suggested Citation

Iyigun, Murat F. and Grossman (deceased), Herschel I., Population Increase, Extralegal Appropriation, and the End of Colonialism (October 1993). NBER Working Paper No. w4488, Available at SSRN: https://ssrn.com/abstract=240072

Murat F. Iyigun

University of Colorado at Boulder - Department of Economics ( email )

Campus Box 256
Boulder, CO 80309
United States
303-492-6653 (Phone)
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Harvard University - Center for International Development (CID) ( email )

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United States

IZA Institute of Labor Economics

P.O. Box 7240
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Germany

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