Long‐term trends in economic inequality: lessons from colonial Botswana, 1921–74

Abstract

This article contributes to the growing literature on colonial legacies influencing long‐term development. It focuses on Botswana, a case where the post‐independence diamond‐led economy has been considered an economic success story, despite its high levels of inequality. Here it is argued that this pathway of rapid resource‐driven growth combined with increasing socio‐economic inequality had already started during the time of the colonial cattle economy, and that this older case is equally relevant for understanding long‐term growth‐inequality trends in Botswana and other natural‐resource‐dependent economies. Six social tables, covering the period 1921 to 1974, are constructed using colonial archives, government statistics, and anthropological records. Based on the social tables, income inequality is estimated in the colonial and early post‐independence eras, capturing both the formal and informal sectors of the economy. The article demonstrates how the creation of a cattle export sector in the 1930s brought new opportunities to access export incomes, and how this led to a polarization in cattle holdings and increasing income inequalities. Further, with the expansion of colonial administration, government wages forged ahead, increasing income inequality and causing a growing income divide between public and private formal employment.

Income Inequality in French West Africa: Building Social Tables for Pre-Independence Senegal and Ivory Coast

“…While some argue that sub-Saharan African societies became unequal as a consequence of colonization, others suggest that they were characterized by relatively very high inequality also in earlier epochs. This might still be due to contact with the Europeans through the slave trade, but in such case colonialism played at most a secondary role in enrooting inequality as well as under-development (for a synthesis of the debate, Acemoglu and Robinson 2010; Bolt and Hillbom 2016) A quickly-expanding, recent literature on African economic history has gone a long way towards providing better estimates of key economic variables, like per-capita GDP, for many parts of the continent. Although much remains to be done, these studies are beginning to change the very empirical basis upon which discussion of the "African divergence" takes place (Prados de la Escosura 2012; Austin and Broadberry 2014;Broadberry and Gardner 2016).…”

“…Indeed, extractive institutions established by the colonizers in Africa have often been blamed as one of the causes of current underdevelopment (Acemoglu, Johnson, and Robinson 2001;Acemoglu and Robinson 2012;Nunn 2008). In addition, by favoring the interests of European companies and settlers with respect to those of the majority of the African population, government institutions are frequently thought to have heavily affected the distribution of income and wealth in African societies (Acemoglu, Johnson, and Robinson 2005;Bolt and Hillbom 2016). If similar extractive institutions persisted over time, we may be able to identify the roots of current inequality by looking at patterns of income distribution during the colonial period.…”

“…The main difficulty in answering these questions is that we have very limited data about inequality during colonial rule. The main exceptions are Ghana, for which we have some information since 1891 (Aboagye and Bolt 2018), Kenya since 1914 (Bigsten 1987), Botswana since 1921 (Bolt and Hillbom 2016), and Zimbabwe since 1945 (Adelman and Morris 1972).…”

“…Social tables have also been employed to study distribution in African societies in periods close to the one we focus on (e.g. Bolt and Hillbom 2016;Aboagye and Bolt 2018).…”

Introduction ‘Inequality in the Low Countries’

“…4 That phases of pre-industrial economic expansion and rising inequality can go hand in hand was also shown for colonial Botswana. 5 Additionally, new evidence on long term inequality trends for Portugal suggests that early modern phases of economic contraction led to diminishing levels of inequality. 6 On the other hand, recent research across late medieval and early modern Europe has suggested that inequality tended to rise also in the absence of economic growth or during periods of economic decline, underlining the complexity of the relationship between growth and inequality.…”