Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Gothenburg, Department of Economics

No 247: On the Institutional Legacy of Mercantilist and Imperialist Colonialism

Ola Olsson ()
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Ola Olsson: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG

Abstract: The article features a temporal approach to modelling the social impact of Western colonialism. We collect a data set for all former colonies and dependencies that are regarded as countries today (143 observations). Our data, as well as existing theory, suggest that the very heterogeneous era of colonization might be divided into an early ’mercantilist’ wave and a much later ’imperialist’ wave with quite different characteristics. We demonstrate that a commonly used determinant of institutional quality - colonial settler mortality - had a much weaker effect on institutional outcomes during the imperialist scramble for Africa. When we broaden the analysis, it is shown that the positive effect of colonial duration on democracy is strongest among countries colonized during the imperialist era. Controlling for colonial duration, our results further indicate that a long history of statehood is bad for democracy while there is almost no effect of the national identity of the colonizer.

Keywords: colonialism; democracy; institutions; development; settler mortality

JEL-codes: N40; N50; P33

49 pages, March 9, 2007

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