The Economic Legacies of the "Thin White Line": Indirect Rule and the Comparative Development of Sub-Saharan Africa

This paper investigates whether the experience of colonialism, and in particular indirect rule, has contributed to sub-Saharan Africa’s (on average) poor economic performance since independence, and if so which causal mechanisms have contributed to this diminished economic performance. Much of the existing empirical literature on colonial legacies overestimates the capacity of the colonial state and overlooks the most important means by which the “thin white line” maintained “hegemony on a shoestring”:¹ collaboration with indigenous elites.²

In a hugely influential paper, Acemoglu, Johnson and Robinson (AJR) provided evidence that the colonial experience did matter.³ They show that, across 64 former colonies (23 of them African), pre-quinine European settler mortality is correlated with the present-day risk of expropriation and therefore income. If settler mortality has not had a direct effect on income this relationship, they argue, must stem from the policies and associated institutions of colonization, which depended on the number of European settlers. According to AJR most of Africa is characterized by high settler mortality, low levels of European settlement and “extractive” colonial institutions which have persisted to the present.

AJR’s story has limited explanatory power however, especially in the African context. Outside the ‘settler’ colonies, the European population was typically very small, yet economic performance within sub-Saharan Africa has been far from homogenous. It has even been suggested that the ‘peasant’ colonies – where European settlement was negligible or forbidden – have inherited institutions more favorable to the reduction of poverty.⁴ To classify African colonial states as purely ‘extractive’ is an oversimplification that obscures much variation over time and space, and the fact that it was “often in the interests of colonial rulers to facilitate African enterprise.”⁵ AJR overstate the ability of the European powers to impose their ‘chosen’ institutions at will, ignoring the “repeatedly demonstrated capacity [of Africans] to contribute crucially to shaping their own economic destinies.”⁶ If the colonial experience did have long-term economic legacies in Africa, it is clear that “the causal relationships involved are more differentiated than AJR’s formulations recognise.”⁷

Pierre Englebert argues that the key to explaining Africa’s postcolonial economic performance is the ‘legitimacy’ of states and whether or not they are “congruent with informal institutions and norms”. ⁸ In a cross-country quantitative investigation, he constructs a dummy variable for ‘vertical legitimacy’, which supposedly captures “the embeddedness of the postcolonial state into pre-colonial relations of authority,”⁹ and an index of ‘horizontal legitimacy’ – the proportion of the population that belongs to an ethnic group that is split between two or more countries – which is intended to proxy “the extent to which there is agreement about what community the state rules over.”¹⁰ Englebert finds these variables to be significant determinants of ‘good governance’ and therefore economic growth. Englebert sees the line of causality running from “incongruence between pre- and postcolonial institutions” to greater “relative payoffs to domestic elites of adopting neo-patrimonial polices over developmental ones.”¹¹ As others have put it, “having only limited legitimacy, governments were acutely exposed to pressures from their own narrow base of supporters” ¹² while “the mass of rural producers… lack[ed] political organizations with which to defend their interests.”¹³ Englebert claims that state illegitimacy accounts for Africa’s poor economic performance on average – in his model the Africa dummy is insignificant¹⁴ – and the heterogeneity of experiences within Africa; vertical legitimacy accounts for half of the variation across the continent, and horizontal legitimacy 20 percent.¹⁵

While pointing to the arbitrariness of the boundaries drawn at the Berlin conference in creating low horizontal legitimacy, the main limitation of Englebert’s argument is that it does not adequately explain the origins of vertical illegitimacy.¹⁶ While it is true that present-day African states (except Ethiopia) have not developed in a wholly ‘natural’ or ‘endogenous’ manner, it is wrong to claim, as Englebert does, that colonial regimes were able to ‘import’ political institutions of their choosing, and not rely on the legitimacy of pre-existing...