The Role of Ex-Colonizer’s Effect in Long-Run Economic Growth

Abstract

Purpose: This paper aims to explore the relationship of the rate of long-run economic growth expressed through GDP per capita average growth rate during the specified period (dependent variable) to colonizer's past of the states. The ultimate goal of the study is to draw conclusions on significance of the colonizer's past on long-run economic growth among the set of the chosen factors. Design/ Methodology/Approach: For this purpose, econometric regression is estimated with inclusion of variables chosen by Sala-i-Martin, Doppelhofer and Miller (2004) methodology of Bayesian Averaging of Classical Estimates (BACE).Findings: The model specification indicates that there exists no statistically significant effect of past colonial possessions in 1945 on 1960-1996 average rate of growth. Practical Implementation: Results give birth to several potentially promising directions for analysis. Such as improvement and further sophistication of methodology, accounting for Jointness measures from BMA theory and creating joint proxies and/or instrumental variables to address the issue of multicollinearity. Originality/Value: Examination of historical processes, even though not purely economic in nature, does provide an invaluable insight for growth economists, allowing them to account for differences and similarities in states' development paths, assessing properly their relative characteristics, or even serving as an object of the study itself. To the best knowledge of the author, there are a few papers discussing the phenomenon.