Answer

   Acemoglu, Daron, Francisco A. Gallego, and James A. Robinson. “Institutions, Human Capital, and Development.” Annual Review of Economics6, no. 1 (2014): 875-912. Doi:10.1146/annurev-economics-080213-041119.

In this article, the authors go into great length to elaborate on the correlation that exists with respect to three variables; “institutions, human capital accumulation, and long-run economic development” (Acemoglu, Gallego, and Robinson, 2014, p. 908). This is meant to serve the end of illustrating the reasons behind the variance that exists particularly with respect to economic development among countries. Essentially, the authors seek to unearth the reasons behind the variances that exist with regard to the innovativeness of different countries, as well as, the priority areas that are ascribed to by different peoples especially with regard to the accumulation of physical capital, the attainment of educational prowess, and the establishment of institutions so as to determine the extent to which these variables are linked with economic development.

In their work, the authors conduct a literature review of papers written by other scholars with respect to the aforementioned subjects in a bid to establish the link between institutions, human capital, and economic development. The authors conduct an analysis of an article written by North and Thomas (1973) which lays emphasis on the great role played by institutions to ensure economic development in a  country. The contendment herein is that according to North & Thomas, is that factors like innovation, education, economics of scale, and capital accumulation are not the causes of growth; they are growth (Acemoglu, Gallego, and Robinson, 2014). This view was also supported by Acemoglu & Robinson (2012) (Acemoglu, Gallego, and Robinson, 2014). Similarly, in an attempt to provide redemption for the faults that underlay the Ordinary Least Squares (OLS) regressions, the authors build on the work of Gallego (2010), Gallego & Woodberry (2009, 2010), and Woodberry (2012) investment in human capital as evidenced by enrollment in primary schools during the 1900s is a factor that contributed towards early development of peoples (Acemoglu, Gallego, and Robinson, 2014). The use of different institutions by different countries also explains the variance in economic development (Acemoglu, Gallego, and Robinson, 2014).

I agree with the averments laid out by the authors to the effect that institutions as supported by human capital accumulation lead to long-run economic development. Whereas almost all African countries have experienced colonization, this cannot be said to be a definitive factor with respect to the economic development of the countries. A country such as Kenya, for instance, without a doubt can boast of human capital accumulation. This is primarily because Kenya has the best basic education system is Africa. Its education system in this respect is arguably very competitive in the international arena (Ngunjiri, 2010). Kenya therefore, has a huge population of well-educated individuals. However, because of the loophole that exists within the Kenyan institutions, economic development has not been as forthcoming as would have been expected (Ngunjiri, 2010). This is because from as far back as the post-colonial era, the vice of corruption has bedeviled the Kenyan  institutions and the more the country develops (as a result of the availability of natural resources, human capital, and financial aid), the more corruption becomes rampant (Ngunjiri, 2010) this then means that despite the fact that the people within the country may seek to fight against the odds to overcome poverty and rise to the level of the accumulation of physical capital, the compromised state of the country’s institutions cannot allow it to attain long-run economic development.

Daron, Gallego, and Robinson (2014) go into great length to describe the linkage between institutions, human capital, and economic development. They explain that the variances that exist with respect to the investment in human capital and the utility of institutions explain that variance in economic development in different countries.

Acemoglu, D., Johnson, S., & Robinson, J. A. (2001). The colonial origins of comparative development: An empirical investigation. American economic review, 91(5), 1369-1401.

https://www.aeaweb.org/articles?id=10.1257/aer.91.5.1369.

In this article, the authors seek to establish a correlation between institutions and economic performance (Acemoglu, Johnson, and Robinson, 2001). In this regard, the authors particularly look at the variances in mortality rates in Europe and the extent to which the institutions contributed to this first variable. Another factor that is examined alongside institutions is variances in property rights in the various locations. The authors make it apparent that countries that have better institutions, less distortionary policies and more secure property rights are the ones that achieve a greater level of economic development.

I agree with the facts and illustrations provided by the authors with respect to the fact that the development of more secure property rights is one of the determinants that lead to economic development. To this end, it is quite apparent that capitalism leads to economic development. In a capitalist economy property is owned and controlled by individuals (Acemoglu, Johnson, and Robinson, 2001). This ideally means that the availability of goods and services is dependent on the supply and demand in a market as opposed to central planning. This form of ownership of property often results in inequality with regard to the driving force. The inequality often encourages innovation which results in economic development.

Mishra, B. K., & Rastogi, S. (2017). Colonial Deindustrialisation of India: A Review of Drain Theory. South Asian Survey, 24(1), 37-53.

In this article, the authors seek to provide an exploration of the negative effects of the British rule on Indian industries. The heavy financial burden and industrial losses borne by India as a direct result of the British rule cannot be underestimated. As argued by many Indian nationals, the effect of British presence in India can be felt up to today. Based on the review of the economic policies of the British Raj, the authors illustrate that there was an extensive drain of resources in India and this has had a ripple effect on the economic state of India. The authors provide an in-depth illustration of the role of the economic policies of the British Raj in the institutionalized economic drain of India during the colonial times.

The question of unequal exchange as could be witnessed during the colonial times in India has also been espoused by the authors. It is essentially true that the British East India Company adversely exploited the human capital that was available through slavery and/or underpayment for hard labor (Mishra and Rastogi, 2017). The Indians were also transported to various British colonies wherein they offered hard labor and were exposed to extremely hard circumstances that were far from being proportionate to the remuneration they would receive (Mishra and Rastogi, 2017). They were, for instance, transported to the East African British Protectorate and in 1898, over a 9-month period, man-eating tsavo lions prowled on and devoured about 100 Indian and African men who were working to build the railway therein (Mishra and Rastogi, 2017). Apart from the building of the railway, the Indians were required to undertake numerous other tasks and they were exploited in various ways. The unequal exchange also occurred with respect to the extraction of resources from India vis-à-vis the investments that were being made thereto for the benefit of India.

Bertocchi, G., & Canova, F. (2002). Did colonization matter for growth? An empirical exploration into the historical causes of Africa’s underdevelopment. European economic review, 46(10), 1851-1871.

In this article, the authors seek to espouse on the effects of colonial heritage on the economic development of African countries in the present day. The authors established that the colonial heritage of a country’s colonizers had an effect on the growth pattern that was to be exhibited by the colonized country (Bertocchi, G., & Canova, 2002). The authors also established that colonial heritage had an effect on the human capital and physical capital accumulation exhibited in the particular countries. Essentially, the authors have an appreciation of the fact that whereas the average economic growth rate of African countries is below the world average, there are Variances within the continent with respect to the growth rate and this variance is as a result of the colonization history of the countries and the colonial heritage that came to be experienced by the African countries.

The main contention fronted by the authors is that the variance in economic growth in Africa can be explained by reference to two factors; the index or identity of the metropolitan ruler and the degree of economic penetration exerted thereto (Bertocchi, G., & Canova, 2002). This is proven by proven by reference to variables such as investment-output ratio, index of ethnic fractionalization, and school attainment rates (Bertocchi, G., & Canova, 2002). The study conducted by the authors substantially reveals that variance with respect to the above stated two variables substantially affects the economic growth rates exhibited by the different countries. This proposition can be illustrated by reference to two countries; Egypt and Zimbabwe. Based on the illustration provided by the authors, Egypt received its independence in 1922 whereas Zimbabwe received its independence in 1965 (Bertocchi, G., & Canova, 2002). The variance with respect to the time the countries received their independence speaks to the variance in economic penetration exerted by the UK. Essentially, because of the time factor, the degree of penetration was regressive and this to an extent speaks to the difference in economic growth patterns exhibited by the two countries.

Whereas the authors present quite a formidable argument, I have reservations with respect to various points that they have put across. I particularly opposed to the view that Africa has dysfunctional institutions, ethnic conflicts, and other related features of instability because of the colonial domination that the countries received at one point in history (Bertocchi, G., & Canova, 2002). I believe the existence or non-existence of dysfunctional institutions in particular depends on the individual country’s leadership and vision from the post-independence period. This can be proven from the fact that there are countries that had the same colonizer yet the economic growth pattern of the two countries is completely different. For instance, when a comparison between Kenya and Egypt is drawn, it is apparent that Egypt is way ahead of Kenya in terms of economic growth yet both countries were colonized by the UK. The annual GDP of Kenya stands at 74.94 billion whereas the GDP in Egypt is 235.4 billion (Bertocchi, G., & Canova, 2002). This is attributable to the leadership and vision that was exhibited by the respective countries when they finally received their independence. Further, countries like Kenya would have been in a position to compete competently with Egypt since the former country has numerous resources (some of which have remained untapped)  but because of vices like corruption and ethnic politics, Kenya has experienced stagnation (Bertocchi, G., & Canova, 2002). This has nothing to do with the colonial heritage of the country. However, the influence of the colonial heritage cannot be completely ignored. In many African countries the governments that took power after the colonial masters left inherited the capitalist systems that had already been put in place.

Bertocchi and Canova (2002) put forth a compelling argument with respect to the effect of colonization on the economic growth of African countries. The identity of the metropolitan ruler and the degree of economic penetration exerted thereto has a substantial bearing on the economic direction of the respective African countries.

Grier, R. M. (1999). Colonial legacies and economic growth. Public choice, 98(3-4), 317-335.

In this article, Grier (1997) focuses his lens on answering the question regarding the effect of the distinctive colonial legacies on the economic development of countries during the post-colonial phase of a country’s political life. Grier takes a sample of 63 ex-colonial states that received their independence between 1961 and1990 and from this point of departure he examines the variance in the economic and political development of the countries with reference to the distinctive colonial legacies experienced by the countries. The countries that were more developed economically had more educated populations, as well as, better GDP. The results of the study that was conducted by Grier revealed that colonial legacies actually had an effect on the development exhibited by the countries. This article is effective in illustrating the impact of colonial legacies on the economic development of countries during the post-colonial era.

Most of the arguments that are fronted by Grier are premised on the fact that there are discrepancies with respect to the economic development of various former colonies and that these discrepancies are primarily as a result of the variance in colonial legacies. Grier (1997) particularly pointed out that former British colonies perform substantially better than their Spanish and French counterparts. He attributes this to the fact that the resources that were borne by the British were significantly more than what was borne by the French and Spanish thus they could make substantial investment in their colonies through the provision of education and the building of institutions and infrastructure which set the British colonies at a position of strength even during the post-colonial era (Grier, 1997). By contrast, the French did not have resources that could match the one borne by the British thus investment on education, infrastructure, and institutions was slower. This according to Grier is one of the factors that necessitated the variance that can be witnessed up to today.

Grier (1997) also indicates that the duration of colonization also significantly affected the variance in development and growth witnessed in the various former colonies. To this effect, the contention is that countries that were colonized for a longer period of time exhibited more development and growth (Grier, 1997). The argument herein is that by the time the countries were being released so that they could operate independently, their economy had stabilized since the colonizer ideally had more resources that could be used in the colony.

In my opinion, the argument fronted by Grier to the effect that former British colonies are economically better than French and Spanish colonies because of the variance in the economic muscle of the respective colonizers is indeed true. It was impossible for a colony to give that which it did not have thus the British invested more on education, infrastructure, and institutions because it had the capacity to make such investments. I, however, have reservations with regard to the argument that countries which were colonized for a longer period of time exhibit more stability. This argument is inaccurate. Egypt was colonized for about three decades whereas Nigeria was colonized for six decades yet there is a world of a difference between the economic developments exhibited by the two countries. It is essentially apparent that Egypt is more economically stable than Nigeria.

Grier’s article is a reliable source in discovering the role of respective colonial legacies in the economic development of various countries. Grier (1997) makes it clear that the variance in economic development is substantially as a result of the variance in colonial legacies experienced by different former colonies.

Smith, S. (1979). Colonialism in economic theory: The experience of Nigeria. The Journal of Development Studies, 15(3), 38-59.

In her article, Sheila Smith focuses her attention on the drain theory as evidenced by the agricultural activities in Nigeria in the wake of the colonial governance therein. She indicates that within less than two decades, there was a massive shift in the economic structure of Nigeria as a colony so that she was charged with the heavy burden of producing primary agricultural export goods for consumption by the European market. The article is mainly premised on the illustration of the tremendous growth of export production in Nigeria and the role the colonial state played in the transformation process (Smith, 1979). The practical illustrations provided by Smith (1979) are effective in demonstrating the drain theory as it applied in the African context.

During colonization, one thing that stood out was the fact that the colonizers had complete or most of the control over natural resources, land, and products of trade. The inhabitants of the colony were mostly reduced to manual laborers or servants (Smith, 1979). In colonial Nigeria however, a central outstanding feature was that all the land remained in the ownership of Africans. This could be attributed to the “vent-for-surplus” theory as explained by Adam Smith (Smith, 1979). Essentially, the massive surplus production of agricultural goods occurred without the direct control of the colonial administrators. This form of economic enterprise became distinctive in West Africa during the colonial times because it was already in existence and the changing circumstances coupled with the new discoveries made by the African farmers inspired the Africans to work harder. Essentially, the movement towards international trade was not forced or coerced by the colonizer in the first instance, but it was in fact initiated by the Africans.

Essentially, Smith (1979) presents an argument which is to the effect that the African farmers were empowered and economic development through agriculture was a medium that did not receive much resistance in the first instance. The Nigerian farmers, for instance, recorded positive response to price incentives which could be evidenced by reference to the fact that in the 19^th century, “the volume of cotton exported from Lagos rose fivefold during and after the American Civil War when world supplies were tight, then dwindled later as the world price declined” (Eicher, 1967, p. 1161). However, it is not absolutely accurate that the method of the realization of massive surplus for the sake of international trade was strictly voluntary on the part of the Africans. The British in fact took advantage of the trade expansion realized to introduce the doctrine of ‘dual mundane’ (Eicher, 1967). This meant that the resources of the country (including; human resource, land, and produce/ products) were to be used not only for the benefit of the natives but also for the benefit of the international community; and particularly the British. Whereas Smith (1974) places emphasis on the fact that the rapid growth of export production was as a result of the natives’ own initiative and inspiration, the reference to the ‘dual mundane’ doctrine, clearly shows that Africans were required to work harder and meet their obligations thereto.

It is evident that West Africa had an upper hand compared to the rest of Africa during colonization. Smith’s paper shows the clear difference between the economic development of Nigeria and that of the rest of the colonies in Africa such as Angola, Kenya, and South Africa. Smith contends that the rapid expansion in agriculture and export trade was as a result of the African people’s own initiative towards economic growth by the vent for surplus theory. However, the rapid growth of export trade was not plainly voluntary. The British also utilized the ‘dual mundane’ doctrine to require the Africans to work harder so as to meet their obligations.