Working Paper: NBER ID: w27893
Authors: Sara Lowes; Eduardo Montero
Abstract: All colonial powers granted concessions to private companies to extract natural resources during the colonial era. Within Africa, these concessions were characterized by indirect rule and violence. We use the arbitrarily defined borders of rubber concessions granted in the north of the Congo Free State to examine the causal effects of this form of economic organization on development. We find that historical exposure to the concessions causes significantly worse education, wealth, and health outcomes. To examine mechanisms, we collect survey and experimental data from individuals near a former concession boundary. We find that village chiefs inside the former concessions provide fewer public goods, are less likely to be elected, and are more likely to be hereditary. However, individuals within the concessions are more trusting, more cohesive, and more supportive of sharing income. The results are relevant for the many places that were designated as concessions to private companies during the colonial era.
Keywords: Congo Free State; rubber concessions; colonialism; economic development; indirect rule
JEL Codes: D72; N47; O15; O43; Z1; Z13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| historical exposure to rubber concessions (L72) | worse education outcomes (I24) |
| historical exposure to rubber concessions (L72) | less wealth (D31) |
| historical exposure to rubber concessions (L72) | lower height-for-age percentiles (I32) |