Income inequality and export-oriented commercialization in colonial Africa: Evidence from six countries

Abstract

Limited knowledge of African historical inequality trajectories hampers our understanding of inequality outcomes today and leads to a major omission in debates about global inequality. Economies in colonial Africa were characterized by a process of export-oriented commercialization. We hypothesize that this process itself, the capital intensity of the commodities produced, and the relative importance of European and Asian expatriates and settlers in the economy shaped heterogeneous inequality outcomes. We evaluate these hypotheses using 33 social tables from six predominately agricultural countries between 1914 and 1969. Social tables capture income across the full distribution, aggregated in classes. We assess and improve the commensurability of the different social tables. We then apply different inequality metrics, and find that Gini and Theil coefficients and Inequality Extraction Ratios rose over time. Gini coefficients moved in conjunction with the real value of commodity exports per capita. Using Theil decompositions, we observe a trade-off between inequality among African classes on the one hand, and among non-Africans and between races on the other. Whenever present, non-Africans captured a large share of the export profits. Inequality patterns towards the end of the period suggest that capital-intensive commodities were associated with higher levels of inequality in the agricultural sector.