Abstract
This chapter provides a simple model of two styles of imperialism that integrates the colonial origin and endowment views. First, the ‘economically-oriented’ style is characterized by a strategy that aims to exploit colonial resources in order to satisfy the economic needs of the metropolis. Consequently, this style of imperialism renders a pragmatic empire, with purely economic goals and sensitive to the initial conditions of each territory, since the specific colonial policy required to maximize rents and satisfy metropolitan needs will depend on the particular characteristics of each colony. The ‘politically-oriented’ style of imperialism is characterized by a colonial strategy that consists of expanding the territorial domains of the colonizing power for non-economic reasons, such as the glory or prestige of the nation or religious-ideological motives. In this case, the lack of an economic calculus and the desire to impose political dominion lead to a uniform colonial policy insensitive to initial conditions. Importantly, colonial powers tend to adopt one style of imperialism or the other depending on their domestic circumstances. We argue that the specific conditions prevailing in Britain such as its insularity and liberal economic and political regimes favored the development of an ‘economically-oriented’ style of imperialism. In contrast, the centralist state tradition, the ideological heritage of the Great Revolution and military defeats led France to adopt a ‘politically-oriented’ style. These different models of imperialism were well reflected in the diverging characters of the British and French empires as well as in the different colonial policies adopted. Our model of colonial empires predicts that the endowment view is applicable to the ‘economically-oriented’ style of imperialism, but not to the ‘politically-oriented’ style. Therefore, we expect to observe a negative relationship between precolonial endowments and the current institutional level in the first case but not in the second.
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Notes
- 1.
The rich literature on the determinants of European imperialism considers many factors behind this phenomenon. Initially, the works of Hobson (1902) and Lenin (1917), among others, made the economic explanations of imperialism very popular. Over time this view was highly criticized and a number of alternative explanations emerged that considered factors as diverse as domestic politics, popular pressure, geopolitics or crises on the periphery (see Fieldhouse 1973; Hobsbawn 1987). Although the historiographical discussion is mainly focused on nineteenth-century European imperialism, many of the arguments are applicable to colonialism in general.
- 2.
See Fieldhouse (1973) for an overview of the different economic theories on imperialism.
- 3.
Bringing to the debate this non-economic side of imperialism is to some extent novel because the recent economic literature on the consequences of European colonialism has emphasized much more economic explanations of colonial strategies than other kinds of explanations (e.g., Acemoglu et al. 2001, 2002; Engerman and Sokoloff 1997, 2000; Lange et al. 2006). As noted by Hobsbawn (1987), economic motivations are important for imperialism, but there are also political, emotional, ideological and patriotic impulses.
- 4.
Domestic conditions do not only matter for the style of imperialism adopted (as we define it), but also for many other aspects related to colonial policies such as the quality of the legal system transplanted and so on. However, our focus here is on the relationship between domestic conditions and the style of imperialism, leaving aside their other implications.
- 5.
This point has been emphasized by Lange et al. (2006), who differentiate between ‘mercantilist’ and ‘liberal’ economic models. In both cases the implications are a colonial policy sensitive to initial endowments. We depart from these authors by trying to identify those features of the economic regime that can affect the style of imperialism.
- 6.
Although in our theoretical framework we raise the possibility that domestic conditions can change over time and so the style of imperialism, in the discussion that follows we consider that domestic conditions were essentially persistent so that each imperial power can be characterized by one style of imperialism. This assumption seems stronger for colonial empires spanning over several centuries, but it is still a reasonable assumption according to historical evidence. For example, Cain and Hopkins (1980) state that their interpretation about the close relationship between domestic economy and British imperial expansion in the interval 1750–1914 is applicable to the entire history of British colonial expansion. Notwithstanding, in the empirical analysis we control for the year of colonization of each colony in order to reduce the possible impact derived from a change in domestic conditions in the metropolis.
- 7.
The overseas expansion “between 1750 and 1914 can be explained satisfactorily by linking it with the process of modernization in Britain”; the various phases of the imperial expansion “were closely connected with the development of the domestic economy, the shifting balance of social and political forces which this development entailed, and the varying intensity of Britain’s economic and political rivalry with other powers.” (Cain and Hopkins 1980, p. 489). This connection between economy and colonial empire is sometimes not apparently evident. Thus, many colonies were occupied for strategic reasons, but it is important to note that most of the times the strategic motivation was related to controlling the access to different regions considered vital for trading and shipping interests. In this sense, India was the center of British global colonial strategy precisely because it was of vital importance to the British economy (Hobsbawn 1987). This colony was crucial for British exports as well as for maintaining its international financial position. Within this global strategy, the trade-oriented colonies of Hong Kong and Singapore were also key to articulating overseas exchange.
- 8.
Despite the fact indirect rule was previously applied in some parts of India, Lord Lugard is known to be the colonial administrator that theorized it. Lugard (1919, p. 298) argues for “a single Government in which the native chiefs have well-defined duties and an acknowledged status equalling with the British officials” (see also Lugard 1922). Indirect rule was thus based on cooperation, rather than subordination as in the French case (Crowder 1964; Betts 1985). Along similar lines, Lange (2004, p. 906) argues that the most commonly view for indirect rule is that of Fisher (1991) who describes it as “the incorporation of indigenous institutions—not simply individuals—into an overall structure of colonial domination. From this view, direct rule differs from indirect rule in that it involves the construction of a complete system of colonial domination that lacks any relatively autonomous indigenous component, yet which might be staffed overwhelmingly by indigenous actors.”
- 9.
Lange (2004) provides evidence for 33 former British colonies that indirect rule is strongly and negatively associated with several proxies for postcolonial political development. Comparing the direct and indirect rule systems within India, Iyer (2010) shows that directly ruled areas of British India exhibit significantly lower levels of postcolonial development, as measured through schooling or health provision. A key to understanding why the natives states, which were indirectly ruled, led to better outcomes lays in the fact that hereditary kings had incentives to properly govern their territories, since they could be removed in the event of misrule. In the case of directly ruled areas, it is also important the land revenue system in place. Whenever the ruler was in charge of collecting the revenue directly from cultivators (cultivator-based land revenue system), public good outcomes were superior to those cases in which revenue collection was carried out by landlords (landlord-based land revenue system). The good performance of the indirect rule exercised by hereditary kings in the native states contrasts with that of the indirect rule applied by landlords in British India. This is because, unlike hereditary kings, landlords in British India were not subject to removal in the case of misrule. Therefore, Iyer’s overall results are not that different from those obtained for indirectly ruled areas in Africa. Whenever the incentives faced by the local administrator are not appropriate, indirect rule can lead to poor institutional governance, with negative repercussions on postcolonial development.
- 10.
As a matter of fact, the Brazzaville statement of 1944 was “a reaffirmation of the ideal of ‘assimilation’ to the French nation as the logical outcome of the French ‘mission civilisatrice’” (Lewis 1962, p. 129). Indeed, colonial subjects became citizens of France in 1946.
- 11.
According to Fieldhouse (1973), economic factors played little role in the French decision to occupy Algiers in 1830, which must be explained by domestic political factors, in particular, the desire to improve government prestige. Importantly, Algeria provides useful hints for the understanding of subsequent French imperialism, which was a model of colonial expansion due mainly to political and military considerations rather than to the economic needs of the metropolis. However, despite the limited economic importance of colonies for a continental power like France, supporters of imperialism gave economic justifications for them and, obviously, once territories were occupied France tried to obtain some economic advantage, though with little success.
- 12.
Our view is also broadly supported by Zweigert and Kötz (1998, p. 113) who claim that “French colonial policy always sought in the long-run to assimilate the native populations. English policy was different: true to the principle of ‘Indirect Rule’, English colonial administrators relied as much as possible on existing native rulers, kept the local courts decentralized, [….]. The French, on the other hand, inspired by egalitarian ideals of the Great Revolution and a belief in the superiority of ‘civilisation française’, constantly strove to lead the native population step by step to the higher level of metropolitan culture”.
- 13.
The Spaniards employed a system of coercive labor known as encomienda with the aim of exploiting the densely populated territories of the Aztec and Inca empires, which was accompanied by a complex system of monopolies and trade regulations set up with extractive purposes.
- 14.
Differences across both periods range from innovation in tropical medicine to colonists’ incentives and choice sets (i.e., institutions of European countries in both waves were very different and so was the range of options about the type of institution to implant). This fact, along with the possibility that domestic conditions change over time, supports the inclusion of the year of colonization in the empirical analysis.
- 15.
This suggests that these postcolonial flows of Europeans may be partly responsible for the better outcomes observed nowadays in these countries. However, the fact of choosing Argentina, Uruguay and Chile as major destinations responds, among other reasons, to their better socio-institutional features inherited from the colonial period.
- 16.
Some authors like Grafe and Irigoin (2006) and Irigoin and Grafe (2008) argue against conventional wisdom that supports that the Spanish Empire had a purely extractive character. On the one hand, they claim that the system of governance in colonial Spanish America was highly negotiated rather than absolutist, since the colonial tax system depended to a large extent on regional and local decision-making and the Crown could hardly control the system. On the other, their evidence on the functioning of colonial fiscal systems points to the fact that the aim of the metropolis was not to extract revenues from the colonies for its own benefit. Rather, it aimed at redistributing the revenues to those regions with insufficient revenues as well as at making the colonies self-sufficient and autonomous in deciding how to allocate these interregional transfers. According to these authors, an alignment in fiscal policy between the interests of the elites and the Crown by fostering economic growth may explain why the empire survived as a single political unit over a period of 300 years.
- 17.
According to de Sousa Ferreira (1974, p. 33), “[t]he colonies played a particular and very important role in the Portuguese economy. First, they provided a protected market, supplying raw materials at cheaper prices than world market rates and buying Portuguese products for which, in general, foreign demand is low. Secondly, their foreign exchange earnings from exports and services alleviated the chronic deficit on Portugal’s balance of trade”. All this occurred despite the alleged civilizing mission that Portuguese authorities attributed to the colonial enterprise.
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Oto-Peralías, D., Romero-Ávila, D. (2017). A Model of Two Styles of Imperialism. In: Colonial Theories of Institutional Development. Contributions to Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-54127-3_3
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