INSTITUTIONAL ORIGINS OF AFRICAN DEVELOPMENT: Local governments provide link between pre-colonial states and current economic performance
- 28 Mar 2015
Local governments during the colonial period provide a direct link between pre-colonial states and current patterns of economic development, according to research by Leigh Gardner and Jutta Bolt to be presented at the Economic History Society’s annual conference. This is particularly true in countries where greater power over public resources was delegated to local officials early in the colonial period. This finding not only helps explain differences between African countries, but also inequalities in development outcomes within countries.
Studies of the institutional origins of African development outcomes have recently looked beyond the colonial period to examine the legacies of indigenous pre-colonial institutions. Using measures of pre-colonial institutional quality, this work has shown correlations with current indicators of income or development. But the mechanism by which pre-colonial states had a lasting effect on economic development despite the disruptive effects of colonial rule is often uncertain.
This study uses new data on local government finance to provide a solid empirical link between pre-colonial, colonial and post-independence institutions. It does this in two ways. The first is by identifying more precisely how pre-colonial states were integrated into colonial administrations through the creation of local governments. Using local authority revenue figures, it links the capacity of colonial-era local government to the level of centralisation in pre-colonial states. The second is by showing that the capacity of colonial local governments has had a lasting effect on development outcomes in the post-independence period.
The data show that at least some African colonies had a relatively high level of fiscal decentralisation, with up to 25% of total public funds being raised and spent by local authorities. There was, however, variation both between and within colonies. In some, the level of decentralisation was as low as 5%.
More pronounced were differences in local government capacity within countries. Some local authorities, like the government of Kano in Nigeria, could raise enough revenue to build schools and hospitals as early as the 1930s, or, like Meru in Kenya, donate a Spitfire to the war effort during World War II. Others, however, had budgets of just a few hundred pounds a year from which they could only afford basic salaries for a handful of local officials.
The researchers argue that some of this variation was linked to differences in pre-colonial institutions. Local governments during the colonial period were the successors of pre-colonial African states, but the process of succession was complicated by political and economic change during the period of colonial conquest.
To analyse this link, the study uses anthropological data on pre-colonial state centralisation. For this, it relies on the Ethnographic Atlas compiled by Murdock, which includes 485 societies and a wealth of ethnographic information, including whether societies were ruled by centralised states. Using a map of ethnographic regions, the researchers are able to link pre-colonial structures to local government developments.
The researchers further argue that the variation in the capacity and resources of colonial local governments also had important legacies for economic development. The final decades of the colonial period saw the delegation of responsibility for a range of social services to local governments, but the level of spending varied considerably between different local areas.
This study supports previous research in suggesting not only that colonial investments in human capital influenced later development, but that local inequalities in the provision of services like healthcare and education have been persistent through time.
London School of Economics
University of Groningen