Reconstructing income inequality in a colonial cash crop economy: five social tables for Uganda, 1925–1965

Michiel de Haas (Wageningen University)

Few doubt that colonialism generated new economic cleavages in African societies (Van de Walle 2009). At the same time, we know very little about the extent of such economic inequality in different African colonies and across time. In this article, I measure income inequality in Uganda, located in central-East Africa and colonized by Britain, in five benchmark years between 1925 (mid-colonial period) and 1965 (just after independence). I find that overall income inequality was low compared to other African colonies, but also find that sharp fault lines existed, especially along racial lines.

Based on what we know about Uganda’s pre-colonial and colonial history (Reid 2017), how much inequality should we expect? Uganda’s economy was predicated on smallholder production of export crops – cotton and coffee most importantly (De Haas 2017). In a land-abundant context, this economic structure fostered broad-based access to self-provisioning and cash income, which may have suppressed income inequality. On the other hand, we have reasons to hypothesize that colonial Uganda was unequal.  First, pre-colonial Uganda was far from egalitarian. For example there were sharp inequalities within the centralized Great Lakes Kingdoms, some of which came to make up a large portion of colonial Uganda, as well as between these Kingdoms and other parts of the territory. Second, the agricultural trading and processing sector in colonial Uganda was in the hands of South Asian expatriates, while the higher rungs of the colonial government were filled with Europeans. To what extent were these inequality-suppressing and -inducing factors visible in the country’s income distribution?

Attuning social tables to the context of colonial Africa

To reconstruct Uganda’s colonial inequality landscape, I use the ‘social table approach’, which simplifies the full income distribution of a given population into a smaller number of ‘social classes’. I distinguish eleven such classes for 15 districts each: three mutually exclusive income classes of African wage workers, five mutually exclusive income classes of self-employed earners, two classes of Europeans, and one class of Asians. Social tables have been employed by others in research on colonial Africa as well: Botswana (Bolt and Hillbom 2016), Ghana (Aboagye and Bolt, 2021), Kenya (Bigsten 1987) and Ivory Coast and Senegal (Alfani and Tadei 2019). This literature is synthesized in a recent paper by Hillbom, Bolt, De Haas and Tadei (2021).

My aim is not just to provide in-depth analysis of the Ugandan case, but also to make progress in finetuning the use of social tables in an African colonial context. Most importantly, in the latter respect, I show that it matters a lot what population we use to rank incomes – households or individuals – and how we think of income distribution within households. I demonstrate that households with higher incomes also tended to have more members. This means that such households come out as relatively ‘high income’ when we compare them on an aggregate level, but not when we break down the distribution to their constituent individual members. However, when we allow for intra-household inequality, a household head still benefit from adding more members to the household, as long as he (typically a polygamous man) is able to extract at least some income from additional household members. Thus, in an African, context, where people accumulate ‘wealth in people’ (Guyer and Belinga 1987) and households differ considerably in size, it is important to consider these dynamics explicitly when thinking about and measuring inequality. The results below are robust to using these different assumptions about the ranking population.

How unequal was colonial Uganda?

I answer this question along four lines: in comparison to other African colonies, and in terms of space (regional inequality), race (Africans versus expatriates) and class (income differentiation among African wage earners and the self-employed). I find that in comparative perspective, Uganda was fairly equal and did not see overall inequality rise during the period studied (Figure 1). I attribute this to Uganda’s land abundance and favourable agricultural conditions, which enabled the far majority of households to provision their own food. Moreover, Uganda’s main crop – cotton – was labour intensive and did not favour the rate of unequal accumulation that, for example, livestock did in colonial Botswana (Bolt and Hillbom 2016).

Figure 1: Gini coefficients for Uganda (1925-1965) under different assumptions

Using the Theil coefficient, we can zoom in on how different cleavages contributed to overall inequality (Figure 2). Here, I find that race dominated as the most important fault line in Uganda, especially before the 1950s. The 1930s were most extreme in this respect, as European households earned, on average, some 60 times as much as the average African household, and Asians close to 30 times as much. Regional differences, in the meanwhile were certainly present but contributed only moderately to overall inequality – especially when self-provisioning is taken into account. Inequality among African classes rose in the late-colonial period, as some farmers specialized in coffee and livestock, while the number and average incomes of salaried professionals rose as well.

 

Figure 2: decomposition of inequality in Uganda along lines of race, class and region.

Note - a similar text also appears on the African Economic History Network homepage

References

Aboagye, P. Y., & Bolt, J. (2021). Long-Term Trends in Income Inequality: Winners and Losers of Economic Change in Ghana, 1891-1960. Explorations in Economic History, forthcoming.

Alfani, G. & Tadei, F. (2019). Income Inequality in French West Africa: Building Social Tables for Pre-Independence Senegal and Ivory Coast. UB Economics Working Papers, 396.

Bigsten, A. (1987). Income distribution and growth in a dual economy: Kenya, 1914-1976. (Unpublished doctoral dissertation, Gothenburg University, Gothenburg)

Bolt, J., & Hillbom, E. (2016). Long‐term trends in economic inequality: lessons from colonial Botswana, 1921–74. The Economic History Review, 69(4), 1255-1284.

De Haas, M. (2017). Measuring rural welfare in colonial Africa: did Uganda's smallholders thrive? The Economic History Review, 70(2), 605-631.

De Haas, M. (2021). Reconstructing income inequality in a colonial cash crop economy: five social tables for  Uganda, 1925–1965. European Review of Economic History, forthcoming.

Guyer, J. I., & Belinga, S. M. E. (1995). Wealth in people as wealth in knowledge: Accumulation and composition in Equatorial Africa. Journal of African History, 36(1), 91-120.

Hillbom, E., Bolt, J., De Haas, M. & Tadei, F. (2021). Measuring historical inequality in Africa: What can we learn from social tables? African Economic History Network Working Paper, No. 63

Reid, R. J. (2017). A history of modern Uganda. Cambridge: Cambridge University Press.

Van de Walle, N. (2009). The institutional origins of inequality in Sub-Saharan Africa. Annual Review of Political Science, 12, 307-327.

 

 

 

 

 

L’Histoire Immobile? A Reappraisal of French Economic Growth using the Demand-Side Approach, 1280-1850.

Leonardo Ridolfi (University of Siena) and Alessandro Nuvolari (Sant’Anna School of Advanced Studies)

Historians interested in the study of economic performance of preindustrial societies owe a major intellectual debt to Angus Maddison. Even if by means of somewhat speculative methods, Maddison (2001) produced the first comprehensive set of estimates of GDP per capita for a large group of countries which resulted in an intriguing account of the dynamics of economic growth since the end of the Middle Ages (Maddison 2007).

This preliminary global quantitative assessment has prompted historians to later embark in more refined statistical reconstructions of the long-term evolution of output per capita and to develop new ways to integrate these different country-specific estimates over time and across space (Bolt and Van Zanden 2014, Bolt and Van Zanden 2020).

Notwithstanding the riches of source materials dealing with prices and wages, France has been left at the margins of the ongoing efforts of reconstruction of these “second generation” estimates of GDP per capita.

In this paper, we tackle this issue, by providing new estimates of output per capita for France over the period 1280–1850 using the demand-side approach.

The French case is interesting for two main reasons.

The first reason is that an important historiographical tradition, made popular by the French historian Emmanuel Le Roy Ladurie with a famous article first appeared in the Annales in 1974 (see picture below), has depicted France as a paradigmatic case of an inherently stagnant economy dominated by Malthusian checks and other institutional and cultural constraints. Hence, in this perspective, the French case may perhaps provide new materials for assessing the overall plausibility of the Malthusian model as a suitable empirical characterization of the long run evolution of living standards in Europe before the Industrial Revolution.

The second reason relates to the very origins of modern economic growth in pre-industrial Europe and, more specifically, to the analysis of the so-called “Little Divergence”, the process whereby the North Sea Area became the most prosperous and dynamic part of the continent.

Much discussion surrounds the timing and causes of why, between the Middle Ages and the modern period, the frontier of Europe’s economic development moved from the Mediterranean space and particularly Italy -which so far had been the world economic leader- to the countries of the North Sea region (Allen 2001, Broadberry 2020, De Pleijt and Van Zanden 2016). Despite that, there is still a general lack of consensus on the evolution of living standards and the main determinants of this process. In this context, a fresh assessment of French economic performance, a neighbouring country with multiple political, economic, and military interactions with the North Sea area could contribute to shed new light on the drivers of this initial phase of modern economic growth.

 

 

Results

Our analysis highlights three main results (see Figure 6 of the article, reproduced below).

First, French output per capita fluctuated with no trend over the long term, with perhaps the exception of a modest “efflorescence” of economic growth during the seventeenth century. Until the seventeenth century, this pattern of growth chimes with Le Roy Ladurie’s (1974, p.688) notion of “motionless history” according to which ‘malgré immenses changements parmi les superstructures celui-ci tel en lui-même se retrouve finalement très proche la veille des famines de la Fronde et de celles de 1693 ou de 1709 de ce il était trois siècles et demi ou quatre siècles auparavant la veille de la famine de 1315 (despite the immense changes of the superstructures, the system finally finds itself very close, on the eve of the famines of the Fronde and those of 1693 or 1709, to what it was three and a half or four centuries before the eve of the famine of 1315).’

In this respect, Italy, the Netherlands and England appear as the main exceptions to this broad European pattern of relative stagnation.

The second result speaks more closely to the debate about the level of comparative development of England and France over the long run which a long historiographic tradition has seen as a useful vantage point for studying the origins of the Industrial Revolution (Crouzet 1985).

Our new series of GDP per capita challenges the notion of an early modern “Little Divergence” between England and France (Allen 2001) and points instead to a later divergence taking place by about the second half of the seventeenth century.

Finally, in our reappraisal of French economic performance, the French growth experience appears to be as an ‘intermediate case’ between the sustained growth pattern of the North Sea region countries and the stagnating or declining trend of the rest of Europe.

 

 

Figure 6. French economic performance in international comparative perspective, 1276–1850

Sources: France: our estimates; England: Broadberry et al. (2015); Holland: Van Zanden and Van Leeuwen (2012); Italy (Centre-North): Malanima (2011); Poland: Malinowski and Van Zanden (2017); Portugal: Palma and Reis (2019); Spain: Alvarez-Nogal and Prados de la Escosura (2013); Sweden: 1300–1560, Krantz (2017); 1560–1850, Schön and Krantz (2012).

Notes: the values in 1990 GK$ dollars are those reported by the authors except for Italy (Centre-North), Poland, Spain, and Sweden because the authors did not report annual series in 1990 GK$ dollars. In these cases, we made the conversions using the following benchmarks: Italy (Centre-North), 1,486$ in 1861 (Malanima 2011, p.218); Poland, 946$ in 1870 (2013 Maddison project); Spain, 1,079$ in 1850 (2013 Maddison project), and Sweden 1,076$ in 1850 (2013 Maddison project). All series are 11-year moving averages.

 

References

Allen, R. C. (2001). The great divergence in European wages and prices from the Middle Ages to the First World War. Explorations in Economic History 38, pp. 411–447.

Álvarez-Nogal, C. and Prados De La Escosura, L. (2013). The rise and fall of Spain (1270–1850). Economic History Review 66, pp. 1–37.

Bolt, J. and Van Zanden, J. L. (2014). The Maddison Project: collaborative research on historical national accounts. Economic History Review 67, pp. 627–51.

Bolt, J. and Van Zanden, J. L. (2020). Maddison style estimates of the evolution of the world economy. A new 2020 update. Maddion Project Working Paper n. 15.

Broadberry, S. (2020). The Industrial Revolution and the Great Divergence: Recent Findings from Historical National Accounting. CEPR Discussion Paper n. 15207.

Broadberry, S. Campbell, B. M. Klein, A. Overton, M. and Van Leeuwen, B. (2015). British economic growth, 1270–1870. Cambridge: Cambridge University Press.

Crouzet, F. (1985). De la supériorité de l’Angleterre sur la France: l'économique et l'imaginaire, XVIIe–XXe siècles. Paris: Libr. Académique Perrin.

De Pleijt, A. and van Zanden, J. L. (2016). Accounting for the “Little Divergence”: What drove economic growth in pre-industrial Europe? European Review of Economic History 20, pp. 387-409.

Krantz, O. (2017). Swedish GDP 1300–1560: A Tentative Estimate. Lund Papers in Economic History 152.

Le Roy Ladurie, E. (1974). L’histoire immobile. Annales. Histoire, Sciences Sociales 29, pp. 673–692.

Maddison, A. (2001), The World Economy: a Millennial Perspective. Paris: OECD.

Maddison, A. (2007), Contours of the World Economy, 1–2030 AD. Oxford: Oxford University Press.

Malanima, P. (2011). The long decline of a leading economy: GDP in central and northern Italy, 1300–1913. European Review of Economic History 15, pp. 169–219.

Malinowski, M. and Van Zanden, J. L. (2017). Income and its distribution in preindustrial Poland. Cliometrica 11, pp. 375–404.

Palma, N. and Reis, J. (2019). From Convergence to Divergence: Portuguese Economic Growth, 1527–1850. Journal of Economic History 79, pp. 477–506.

Schön, L. and Krantz, O. (2012). The Swedish economy in the early modern period: constructing historical national accounts. European Review of Economic History 16, pp. 529–49.

Van Zanden, J. L. and Van Leeuwen, B. (2012). Persistent but not consistent: The growth of national income in Holland 1347–1807. Explorations in economic history 49, pp. 119–30.