I think the Java case is the most interesting in the article — extraction at sufficient scale forced the Dutch to solve real organisational problems, and those solutions outlasted the regime. Fair point, well made.
But there's a complication to consider as well. The infrastructure and the incentive structure came as a package. What persisted in post-independence Indonesia wasn't just sugar factories and irrigation channels — it was also an unwritten settlement about which activities attracted capable people, how officials expected each other to behave, and who the economy was implicitly organised to serve. Unpicking the productive legacy from that inherited pattern proved considerably harder than the physical assets alone would suggest.
On Thailand versus Vietnam — that's probably the sharpest current test case, and it does real damage to simple colonial-origins stories. Vietnam was colonised, bombed back to subsistence, and then run by a communist government for decades. Thailand avoided all of that. And yet we see quite different trajectories.
What it suggests is that what colonial rule did or didn't do directly matters less than what governments selected (and were politically able) to prioritise afterwards — specifically, whether they invested seriously in building capable institutions, professional bureaucracies, and export discipline, or whether they didn't. Thailand had the political space and never quite used it consistently. Vietnam, against most predictions, did.
If colonial origins really do drive long-run outcomes in the way AJR claim, the Thailand-Vietnam comparison has no good answer. Same region, radically different histories — and the country that was colonised, bombed flat, and then collectivised is now the one pulling ahead. The variation that matters seems to operate somewhere else.
The protectionism that curtailed growth opportunities in post-colonial Latin America could be actually seen as a form of extraction - but corralled within each economy, where the extractive elite is the local one, rather than the remote one in the metropole. They are invariably the gatekeepers in/out of the local economy and hence can charge a rent-seeking toll.
Secondly wealth disparity is mostly registered psychologically in a relative way - even an absolute gain will be perceived as a loss if social stratification increases. So even if eg Rhodesian native farm workers were loads better off than comparable Africans they would nurse grievances since they compare themselves to the white elite.
Noam Chomsky, who enjoyed debating undergraduates, used to throw at them the gradual improvement in the standard of living of slaves in America, sneering that this did not prove that slavery was a good system. Which is correct, it doesn't. However, it is good evidence that the overall economy was growing. If your standard of living goes up even under oppression by people who don't care about you, that's a sign that overall economic improvement must be substantial, if it reaches even to the downtrodden.
It's a lesson worth keeping in mind in the present day.
Any other works you can recommend on this subject? (Post-)colonial economics is not my best suit, and if I were to just research it I would end up at marxist or critical theory readings which really don't fit the facts very well often.
I think one important variable that this well written essay perhaps overlooks is the already primitive state of industry and literacy these countries faced (Java, South America and Africa) when the colonial powers first came in. No matter how regressive and inefficient the economic polices of the Spanish and Dutch may have been, their modernising efforts would almost by default have improved the elementary levels of the local populations.
I also don’t think Hong Kong and Singapore are good examples as counter factuals to Acamegolu’s long term institutional argument. The former was developed with progressive land and financial reforms while the former largely started afresh, without the structural institutions of an extractive colonoly per se— functioning almost principally as a transit hub.
I think you make a good point about Singapore and Hong Kong being unique. However, Indonesia, South Korea (completely devastated by its war), Malaysia etc. were all extractive colonies that are now doing quite well. The most interesting current example is Thailand versus Vietnam. Thailand was never colonized but is now lagging behind Vietnam which was colonized, involved in devastating wars and rule by Communists.
I’m certainly not a determinist who believes that colonial extractionist and regressive rule over a society would prevent it from ever thoroughly progressing, especially after almost a century of independence from those very structures. As you rightfully pointed out, countries like Malaysia, SK and Vietnam are great examples of countries who pulled themselves up by the boot straps and chose not resigning to previous grievances as the innovating path forward.
My reading of Acemegolu’s work is that he provides those examples of nations that failed to innovate out of those original extractionist political economies as a evidence of the inefficiencies of a rentier state model vs more free market structures found in the nations with favoured structural reform by the Europeans. Which, as the OP himself affirms, is almost self-evident.
I made my earlier comment sort of as a way to exonerate what I think is a misreading of Acamegolu’s work. He isn’t a post-colonial theorist who believes western nations have forever plagued certain peoples to an eternity of poverty with no agency for change. Rather, he simply identifies those areas that failed to develop on the key industries and structures left by the colonial states to prove his institutional thesis. I may be wrong but i feel as if the OP may believe that that is what the institutional argument of Acamegolu assumes.
This article reminds me of this part of the Monty Python movie "The Life of Brian": https://www.youtube.com/watch?v=9foi342LXQE
I think the Java case is the most interesting in the article — extraction at sufficient scale forced the Dutch to solve real organisational problems, and those solutions outlasted the regime. Fair point, well made.
But there's a complication to consider as well. The infrastructure and the incentive structure came as a package. What persisted in post-independence Indonesia wasn't just sugar factories and irrigation channels — it was also an unwritten settlement about which activities attracted capable people, how officials expected each other to behave, and who the economy was implicitly organised to serve. Unpicking the productive legacy from that inherited pattern proved considerably harder than the physical assets alone would suggest.
On Thailand versus Vietnam — that's probably the sharpest current test case, and it does real damage to simple colonial-origins stories. Vietnam was colonised, bombed back to subsistence, and then run by a communist government for decades. Thailand avoided all of that. And yet we see quite different trajectories.
What it suggests is that what colonial rule did or didn't do directly matters less than what governments selected (and were politically able) to prioritise afterwards — specifically, whether they invested seriously in building capable institutions, professional bureaucracies, and export discipline, or whether they didn't. Thailand had the political space and never quite used it consistently. Vietnam, against most predictions, did.
If colonial origins really do drive long-run outcomes in the way AJR claim, the Thailand-Vietnam comparison has no good answer. Same region, radically different histories — and the country that was colonised, bombed flat, and then collectivised is now the one pulling ahead. The variation that matters seems to operate somewhere else.
A couple of points to add:
The protectionism that curtailed growth opportunities in post-colonial Latin America could be actually seen as a form of extraction - but corralled within each economy, where the extractive elite is the local one, rather than the remote one in the metropole. They are invariably the gatekeepers in/out of the local economy and hence can charge a rent-seeking toll.
Secondly wealth disparity is mostly registered psychologically in a relative way - even an absolute gain will be perceived as a loss if social stratification increases. So even if eg Rhodesian native farm workers were loads better off than comparable Africans they would nurse grievances since they compare themselves to the white elite.
Noam Chomsky, who enjoyed debating undergraduates, used to throw at them the gradual improvement in the standard of living of slaves in America, sneering that this did not prove that slavery was a good system. Which is correct, it doesn't. However, it is good evidence that the overall economy was growing. If your standard of living goes up even under oppression by people who don't care about you, that's a sign that overall economic improvement must be substantial, if it reaches even to the downtrodden.
It's a lesson worth keeping in mind in the present day.
Classic stationary bandit question.
Thank you for this well written article.
Any other works you can recommend on this subject? (Post-)colonial economics is not my best suit, and if I were to just research it I would end up at marxist or critical theory readings which really don't fit the facts very well often.
I think one important variable that this well written essay perhaps overlooks is the already primitive state of industry and literacy these countries faced (Java, South America and Africa) when the colonial powers first came in. No matter how regressive and inefficient the economic polices of the Spanish and Dutch may have been, their modernising efforts would almost by default have improved the elementary levels of the local populations.
I also don’t think Hong Kong and Singapore are good examples as counter factuals to Acamegolu’s long term institutional argument. The former was developed with progressive land and financial reforms while the former largely started afresh, without the structural institutions of an extractive colonoly per se— functioning almost principally as a transit hub.
I think you make a good point about Singapore and Hong Kong being unique. However, Indonesia, South Korea (completely devastated by its war), Malaysia etc. were all extractive colonies that are now doing quite well. The most interesting current example is Thailand versus Vietnam. Thailand was never colonized but is now lagging behind Vietnam which was colonized, involved in devastating wars and rule by Communists.
I’m certainly not a determinist who believes that colonial extractionist and regressive rule over a society would prevent it from ever thoroughly progressing, especially after almost a century of independence from those very structures. As you rightfully pointed out, countries like Malaysia, SK and Vietnam are great examples of countries who pulled themselves up by the boot straps and chose not resigning to previous grievances as the innovating path forward.
My reading of Acemegolu’s work is that he provides those examples of nations that failed to innovate out of those original extractionist political economies as a evidence of the inefficiencies of a rentier state model vs more free market structures found in the nations with favoured structural reform by the Europeans. Which, as the OP himself affirms, is almost self-evident.
I made my earlier comment sort of as a way to exonerate what I think is a misreading of Acamegolu’s work. He isn’t a post-colonial theorist who believes western nations have forever plagued certain peoples to an eternity of poverty with no agency for change. Rather, he simply identifies those areas that failed to develop on the key industries and structures left by the colonial states to prove his institutional thesis. I may be wrong but i feel as if the OP may believe that that is what the institutional argument of Acamegolu assumes.