The Long-Term Effects of Africa's Slave Trades - Social Sciences ...

causing current underdevelopment. I first reviewed the historical evidence
on the characteristics of African societies that were most affected by the slave
trades. The qualitative and quantitative evidence show that it was actually
the most developed parts of Africa, not the least developed, that tended to
select into the slave trades. I also used instrumental variables to estimate
the causal effect of the slave trades on subsequent economic development.
The main instruments I used were the sailing and overland distances from
each country to the closest locations of demand in each of the four slave
trades. Like the OLS estimates, the IV estimates are negative, suggesting
that increased extraction during the slave trades caused worse subsequent
economic performance. As a final strategy, I controlled for observable country
characteristics. These results also confirm that the slave trades had a
causal impact on subsequent economic development.
I then examined the precise channel of causality underlying the relationship
between slave exports and subsequent economic development. Using
historical evidence as a guide, I then examined whether slave exports resulted
in a fragmentation and weakening of states, ethnic fractionalization,
and a deterioration in the quality of judicial institutions. I found support
for the view that the slave trades resulted in weak, politically fragmented
states, ethnic fractionalization, and poor judicial institutions.
A Deriving the Bias from the Under-Sampling of
Slaves from the Interior
I show here that the non-classical measurement error present in the slave
export data will result in OLS estimates of the effect of slave exports on
income that are biased towards zero.
To see this, denote the true number of slaves taken from country i by
s ∗ i , the observed number of slaves by s i, distance to the coast by d i , and
economic development by y i . All variables are expressed as deviations from
means. Assume the true relationship between the number of slaves exported
and distance to the coast is given by
s ∗ i = −αd i + ε i (2)
where α > 0 and ε i is i.i.d. drawn from a normal distribution. The relationship
between the observed number of slaves exported s i and the distance to
the coast d i is given by
s i = s ∗ i − γd i + ν i (3)
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