Competition and rent-seeking during the slave trade

by Jose Corpuz (University of Warwick)

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The Royal African Company of England (RAC) gave gifts and similar payments to African chiefs for exclusive services. But African chiefs who could stop or redirect trade from inland could extract payments from RAC, particularly when competition from other English merchants increased.

There is a lot of descriptive evidence on rent-seeking in Africa during the slave trade. My research provides quantitative evidence of rent-seeking and shows that it changed over time. I constructed the database of more than 20,000 payments myself, from handwritten seventeenth century RAC archives.

My study contributes to the debate about rent-seeking during the slave trade. The ‘fishers-of-men’ view argues that slaves were a common property resource and competition among enslavers would dissipate any rents (Thomas and Bean, 1974). The ‘hunters-of-rent’ view, however, argues that the competition was restricted by barriers to entry, enabling rents (Evans and Richardson, 1995).

My research provides quantitative evidence that rent-seeking existed and shows when, where and how much rent-seeking increased during the slave trade.

I used my own dataset to examine rent-seeking during the slave trade, looking at more than 20,000 payments (for example ‘dashey,’ a local term used in West Africa which literally means gift) that the RAC made to seventeenth century chiefs in Ghana. RAC made these payments to African chiefs in return for exclusive trade with caravan merchants from inland. These payments were separate from any price paid for slaves themselves.

I use an event study to show that this power of chiefs increased when the RAC lost royal privileges after the Glorious Revolution in 1688, and this change increased competition from other English merchants.

I answer three questions. First: what was the distribution of payments across chiefs?

I find that the distribution of payments to chiefs was unequal. In particular, the highest-ranking head chiefs received the greatest value of payments per capita. These findings provide quantitative evidence that the slave trade was ‘the business of kings, rich men, and prime merchants’ (in other words, elites) and that the distribution of payments among them was unequal (Hopkins, 1973).

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Second: what commodities were included and how did this change over time?

Usually, the payments were European cloth, firearms and alcohol. Head chiefs used European cloth to signal authority and prestige, and received most of the European cloth, particularly when their bargaining position improved after 1688.

These findings highlight the importance of payments as a channel through which European merchants supplied goods in response to African demand. Unlike Rodney’s (1988) ‘How Europe Underdeveloped Africa’ thesis, European merchants did not determine the goods they supplied to Africans, and Africans were not passive recipients of these goods.

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Third: did payments rise after the Glorious Revolution in 1688, reducing the RAC’s privileges – such as the power to seize other English merchants’ ships and cargoes (Davies, 1957; Carlos and Kruse, 1996) – and facilitating competition from other English merchants?

Using ‘diff-in-diff’ estimation, I find that the RAC made greater payments to chiefs whose compliance was most important in deterring other English merchants from competing with the RAC after 1688.

In particular, I find that payments increased the most to chiefs in ‘non-coast caravan routes’ or locations where they could stop or redirect trade flowing from inland. The chiefs demanded an increased share of the RAC’s total revenue. Qualitative evidence from the letters (Law, 2001, 2006, 2010) supports the view that this increase can be explained by the chiefs’ increased bargaining power.

Untitled 4Overall, the findings are consistent with the hunters-of-rent view of rent-seeking during the slave trade. Some chiefs found themselves in the right place at the right time and took advantage of the situation.

 

References

Carlos, AM, and J Brown-Kruse (1996) ‘The decline of the Royal African Company: Fringe firms and the role of the charter’, Economic History Review 49(2): 291-313.

Davies, KG (1957) The Royal African Company, Longmans, Green and Co. Ltd.

Evans, EW, and D Richardson (1995) ‘Hunting for rents: The economics of slaving in pre-colonial Africa’, Economic History Review 48(4): 665-86.

Hopkins, AG (1973) An Economic History of West Africa, Routledge.

Law, R (2001, 2006, 2010) The English in West Africa, 1685-1698: The local correspondence of the Royal African Company of England, 1681-1699 (Vols. 1-3), Oxford University Press.

Rodney, W (1988) How Europe Underdeveloped Africa, Bogle-L’Ouverhure Publications.

Thomas, RP, and RN Bean (1974) ‘The fishers of men: The profits of the slave trade’, Journal of Economic History 34(4): 885-914.

THE IMPACT OF MALARIA ON EARLY AFRICAN DEVELOPMENT: Evidence from the sickle cell trait

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poster “Keep out malaria mosquitoes repair your torn screens”. U.S. Public Health Service, 1941–45

While malaria historically claimed millions of African lives, it did not hold back the continent’s economic development. That is one of the findings of new research by Emilio Depetris-Chauvin (Pontificia Universidad Católica de Chile) and David Weil (Brown University), published in the Economic Journal.

Their study uses data on the prevalence of the gene that causes sickle cell disease to estimate death rates from malaria for the period before the Second World War. They find that in parts of Africa with high malaria transmission, one in ten children died from malaria or sickle cell disease before reaching adulthood – a death rate more than twice the current burden of malaria in these regions.

 

According to the World Health Organization, the malaria mortality rate declined by 29% between 2010 and 2015. This was a major public health accomplishment, although with 429,000 annual deaths, the disease remains a terrible scourge.

Countries where malaria is endemic are also, on average, very poor. This correlation has led economists to speculate about whether malaria is a driver of poverty. But addressing that issue is difficult because of a lack of data. Poverty in the tropics has long historical roots, and while there are good data on malaria prevalence in the period since the Second World War, there is no World Malaria Report for 1900, 1800 or 1700.

Biologists only came to understand the nature of malaria in the late nineteenth century. Even today, trained medical personnel have trouble distinguishing between malaria and other diseases without the use of microscopy or diagnostic tests. Accounts from travellers and other historical records provide some evidence of the impact of malaria going back millennia, but these are hardly sufficient to draw firm conclusions. Akyeampong (2006), Mabogunje and Richards (1985)

This study addresses the lack of information on malaria’s impact historically by using genetic data. In the worst afflicted areas, malaria left an imprint on the human genome that can be read today.

Specifically, the researchers look at the prevalence of the gene that causes sickle cell disease. Carrying one copy of this gene provided individuals with a significant level of protection against malaria, but people who carried two copies of the gene died before reaching reproductive age.

Thus, the degree of selective pressure exerted by malaria determined the equilibrium prevalence of the gene in the population. By measuring the prevalence of the gene in modern populations, it is possible to back out estimates of the severity of malaria historically.

In areas of high malaria transmission, 20% of the population carries the sickle cell trait. The researchers’ estimate is that this implies that historically 10-11% of children died from malaria or sickle cell disease before reaching adulthood. Such a death rate is more than twice the current burden of malaria in these regions.

Comparing the most affected areas with those least affected, malaria may have been responsible for a ten percentage point difference in the probability of surviving to adulthood. In areas of high malaria transmission, the researchers’ estimate that life expectancy at birth was reduced by approximately five years.

Having established the magnitude of malaria’s mortality burden, the researchers then turn to its economic effects. Surprisingly, they find little reason to believe that malaria held back development. A simple life cycle model suggests that the disease was not very important, primarily because the vast majority of deaths that it caused were among the very young, in whom society had invested few resources.

This model-based finding is corroborated by the findings of a statistical examination. Within Africa, areas with higher malaria burden, as evidenced by the prevalence of the sickle cell trait, do not show lower levels of economic development or population density in the colonial era data examined in this study.

 

To contact the authors:  David Weil, david_weil@brown.edu

Gender, ethnicity, and unequal opportunity in colonial Uganda: European influences, African realities, and the pitfalls of parish register data

by Michiel de Haas and Ewout Frankema (University of Wageningen)

The full article is published by The Economic History Review and it is available here

 

The Renaissance of African economic history in the past decade (see Austin and Broadberry 2014)  has opened up a vast body of qualitative and quantitative source materials.  Most of these materials were originally produced by European missionaries, merchants, travellers, or colonial officials, and thus reflect the biases (explicit or unspoken) of people who were alien to the societies to which their writings and statistics pertain. Moreover, many of the analytical concepts and empirical methods used by scholars to study these materials today, were originally designed for the study of European economic history. To prevent what Gareth Austin has described as ‘conceptual Eurocentrism’ in narratives of long-term African development, it is imperative to scrutinize and debate the applicability of concepts such as national income, real wages, human capital, social mobility, crime, or gender inequality in an African historical context.

In our article, we engage with a recent study by Meier zu Selhausen and Weisdorf to show how selection biases in, and Eurocentric interpretations of, parish registers have provoked an overly optimistic account of European influences on the educational and occupational opportunities of African men and women in Kampala, Uganda. We re-evaluate the link between colonial rule and gendered educational and occupational opportunities in Uganda along several lines. Here, we address two key points: 1) sample selection biases in African parish register data and 2) the flawed  juxtaposition of ‘African tradition’ and ‘European modernity’ to understand educational and occupational change during the colonial period.

Firstly, the use of parish registers by Meier zu Selhausen and Weisdorf illustrates clearly how data biases particular to the African context can result in doubtful conclusions. Parish registers have been widely used in European economic and demographic history, and are typically seen as fairly representative. However, the parish registers extracted from Kampala’s Anglican Namirembe Cathedral exhibit a strong bias towards the upper social classes: elites converted earlier, only the wealthiest and most well-connected African Christians opted for a ring marriage, and this particular Cathedral emerged as the elite church of early colonial Uganda.

To substantiate this issue quantitatively, we re-chart literacy and numeracy trends using microdata from the 1991 population census, made available by IPUMS. As Figure 1 shows, a representative selection of men and women from birth cohorts in the census data accumulated literacy and numeracy much slower than the population of brides and grooms in Namirembe Cathedral. While the Namirembe grooms achieve practically full literacy from the 1890s birth cohort onwards, and brides from the 1900s onwards, a random sample of Kampala-born men achieved similar rates only for cohorts born from the 1940s onwards, and women from the 1960s. That is: half a century later! Notably, Uganda’s female literacy take-off happened around independence, and the gap between men and women remained large throughout the colonial period.

There is ample reason to believe that similar (and/or potentially other) biases will be found among parish register samples in other African settings. Certainly, our study establishes that such registers, while a promising new source of microdata, should be interpreted with utmost caution.

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Literacy rates and literacy gaps, per birth cohort

Secondly, we show that the dichotomy between African tradition and European modernity is flawed on both sides. The diffusion of Christianity and education in Buganda were not a testament to modernizing influences of Europeans, but rather the consequence of the initiative of the indigenous population of Buganda. Local elites pragmatically sought out political coalitions with European missionaries to further their own ends. Moreover, without the Africanization of the mission the diffusion of literacy and schooling would never have attained significant scale. Thus, the widely accepted idea that the uneven diffusion of missionary education can be explained by European supply factors rather than African demand (see a foundational paper by Nathan Nunn and a large body of subsequent studies) is not supported by the Ugandan case.

At the same time, the modernizing influence of Europeans was limited. Demand for African skilled labour in the colonial economy – which was predicated on rural cash crop production – was very limited, and its distribution was highly uneven, along lines of gender, race, ethnicity and location. Uganda’s economy remained overwhelmingly rural (colonial Kampala never harbored more than 1.5 per cent of Uganda’s population), and the skilled labour market was dominated by Asian and European expatriate minorities.

European influences also hardly benefited gender emancipation in Uganda. We revisit the seminal work of Ester Boserup and note, contrary to Meier zu Selhausen and Weisdorf, that she gives primacy to economic rather than cultural explanations for female labour market marginalization, and is skeptical about the emancipatory impact of European influences in Africa. In line with Boserup’s views, missionaries and colonial officials in Uganda often coalesced with indigenous patriarchal interests to domesticize women – a legacy that Ugandan women and society at large struggle with up until today.

 

To contact the authors:

@michieldehaas

@ewoutfrankema