Monday, September 20, 2004

Law and Order and the impact of the slave trade

One of the most interesting papers I have read in some time! It really made me think.

Law and Order. No not the TV show. Real law and order. The importance of law in order in a society are often overlooked. This is unfortunate as almost nothing has as far reaching of repercussions. This was again made clear this past week when a friend sent me a link to Brad Delong's Economics blog. While the blog may be a bit too political for me, it is none-the less a wealth of interesting and thought-provoking articles.

The one article that had the most impact on me was a story on Nathan Nunn's academic article Slavery, Institutional Development, and Long-run Growth in Africa, 1400-2000 that had me thinking all weekend long.

Short Version: Nunn examines the economies of African nations and finds that there is a negative relationship between economic success in the 1900s and number of slaves exported from the region.

Longer Version:

We know that African economies are notorious underperformers (in Nunn's words "Africa's economic performance in the second half of the twentieth century
has been dismal.") When you ask people why this is so, you will get many answers. Obviously the continent must be made safer and the warring and corruption must end. Then and only then can the many other problems (including AIDs) be effectively solved.

While all regions have problems, Africa seems to have more than its share. Why? Obviously there is no simple answer. Nunn suggests that this poor performance can be at least partially attributed to "two events: the slave trade and colonialism."

To investigate this, the author uses "estimates of the number of slaves exported from each country [and] find[s] that the number of slaves taken from each country is an important determinant of subsequent economic development."

Which is interesting enough. For instance: why is this so? Is it because the nation had experienced population loss? Had would-be leaders been sold into slavery? (Imagine how different the US would be without Franklin, Washington, Hamilton etc).

Or were the conditions that lead to the slave trade (corruption, lack of property rights, etc) so ingrained as to still drag down economic development?

Nunn concludes that it is the latter reason: "...that the relationship between the slave trade and current economic performance works through the slave trade's effect on domestic institutions. Qualitative evidence from the African history literature supports this empirical finding. The slave trades led to a large increase in warfare, banditry, and kidnapping; they weakened previously well functioning domestic institutions, which in many cases led to a complete disintegration of these societies. If the resulting poor institutions persist today, then it follows that they will have a first order effect on economic development."

And in what is scary given what we have seen in warring nations today: " At this time, entire communities degenerated into predatory societies. Warlords and slave raiders became the new leaders and they altered previously existing institutions to facilitate their needs."

While any empirical investigation that spans six centuries is going to face many date problems, Nunn acknowledges these problems and tries to control for them as much as possible. His results are seemingly robust to the various controls used and fairly convincing to this cynic. ;)


BTW even if you do not understand the math, I would strongly urge you to read the history section. I learned MUCH about the slave trade. For instance it did not end until 1913?!!

Link to Brad Delong's coverage of this, including comments.
Link to the Nunn's paper itself

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