The Historical Roots of Global Inequality: The Imposition of Coercive Colonial Institutions in Africa

The extremely high levels of contemporary economic inequality between countries have their historical roots in the eras of colonialism and imperialism. For centuries, major European powers engaged in exploitative economic strategies in colonial territories that were based on violent suppression of colonial peoples and the persistent application of coercion. But coercive institutions were not implemented in the same fashion and at the same time in all colonies. Instead, we observe significant temporal and spatial variation in this respect. Thus, we ask: How can we explain substantial geographic variation in the presence of imperial powers’ coercive state capacity during the eras of colonialism and imperialism? We develop a theoretical framework that emphasizes how a combination of economic incentives and technological conditions that major imperial powers were subject to affects the geographic dislocation of coercive colonial capacity. Our theory suggests that a major shift in imperial military strategy took place as a consequence of industrialization. Prior to and in early phases of industrialization, economic complexity allowed for the large-scale extraction and use of slave labor, constituting a major foundation of socioeconomic inequality. After industrialization, however, a new form of inequality based on the extraction of natural resources became the dominant rationale in the implementation of coercive institutions. A variety of empirical analyses based on an original, hand-coded dataset of colonial forts suggest that these economic incentives indeed were a key driver of the placement of coercive institutions.