Structural Impediments to African Growth? New Evidence from Real Wages in British Africa, 1880–1965

Abstract

Recent studies on African economic history have emphasized the structural impediments to African growth, such as adverse geographical conditions and extractive colonial institutions. The evidence is mainly drawn from cross-country regressions on late 20 th century income levels, assuming persistent effects of historical causes over time. But to which extent has African poverty been a persistent phenomenon? Our study sheds light on this question by providing new evidence on long-term African growth-trajectories. We show that slave trade regressions are not robust for pre-1970s GDP per capita levels, or for pre-1973 and post-1995 growth rates. We calculate urban unskilled real wages of African workers in nine British African countries 1880-1965, adopting Allen's (2009) subsistence basket methodology. We find that real wages were above subsistence level, rose significantly over time and were, in major parts of British Africa, considerably higher than real wages in Asian cities up to, at least the 1930s. We explain the intra-African variation in real wage levels by varying colonial institutions concerning land alienation, taxation and immigration. Acknowledgements:We are grateful to

Output Per Head in Pre-Independence Africa: Quantitative Conjectures

“…As for Ghana, the gap between average and subsistence incomes seems to have widened between World War I and the Great Depression and, again, after World War II (Figure 2). These results appear to be consistent with the negative impact of World Wars on living standards across the British colonies (Frankema and van Waijenburg 2012). In the case of Nigeria, it is worth noting that the available welfare ratios correspond to the southern region, mostly to Lagos, that is, by far, the richest part of the country, so we can hypothesize that average national welfare ratios were significantly lower (Aka 1995, Timothy et al 2008.…”

“…11 Frankema and van Waijenburg's (2012) welfare ratios suggest that countries in British Africa were above the physiological subsistence level or extreme poverty threshold of $300 for most of the colonial period. However, these welfare ratios derive exclusively from urban wages, which are part of the formal sector (Heldring and Robinson 2012), while a nominal urban-rural wage gap exists, and are computed by assuming full employment (a working year of 312 days).…”

“…. It is worth bearing in mind the possible impact on living standards of immigration from Asia towards the East and Southern African countries that did not take place in West Africa (Frankema and van Waijenburg's 2012).…”

Tracing the reversal of fortune in the Americas: Bolivian GDP per capita since the mid-nineteenth century

“…In other words, all these processes call for careful specific analyses and it is difficult to interpret them on the basis of unidimensional institutional explanations. As has been highlighted by Austin (2008) and Frankema and Van Waijenburg (2012) in the case of African economies, the Bolivian case also represents a clear warning against the risks of the "compression of history". On the other hand, we assume a nuclear family of a father, a mother and two children consumed the same quantity as three male adults (Allen et al, 2011).…”

“…For instance, in the case of Sub-Saharan Africa, Austin (2008) stresses the difficulty of providing general explanations for a region with wide variations in economic growth experiences over time and across countries. Similarly, Frankema and Van Waijenburg (2012), in their reconstruction of the evolution of real wages in several British African colonies between 1880 and 1965,…”