Root Causes of African Underdevelopment

Sambit Bhattacharyya

No 200704, Working Papers in Economics and Development Studies (WoPEDS) from Department of Economics, Padjadjaran University

Abstract: What is the root cause of Africa’s current state of under-development? Is it the long history of slave trade, or the legacy of extractive colonial institutions, or the fallout of malaria? A precise answer still eludes us. This paper investigates the relative contribution of these historical factors using an instrumental variable approach. The results show that malaria matters the most and all other factors are statistically insignificant. The mechanism through which malaria impacts economic performance is demonstrated by a strong negative relationship between malaria and national savings and a two period overlapping generation model. The model shows that high malaria incidence adversely affects growth by increasing both mortality and morbidity. Increased mortality from malaria induces households to increase current consumption and save less for the future. Increased morbidity on the other hand adversely affects labour productivity. The combined impact of these two effects is a slowdown of capital accumulation and economic growth.

Keywords: Malaria; Colonial Institutions; Slave Trade; Economic Development (search for similar items in EconPapers)
JEL-codes: N0 O11 O41 O57 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2007-04, Revised 2007-04
New Economics Papers: this item is included in nep-afr and nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Root Causes of African Underdevelopment (2009)
Working Paper: Root Causes of African Underdevelopment (2008)
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