MONEY AND COLONIALISM
Since 2020, there have been military coups in six Francophone African countries—Mali, Chad, Guinea, Burkina Faso, Niger, and most recently Gabon. The region has also witnessed unprecedented civic protests against the French government.
In a 2021 book, FANNY PIGEAUD and NDONGO SAMBA SYLLA examine the economic consequences of France’s imposition of a common currency, the CFA franc, on its former African colonies.
From the text:
“There are four large handicaps imposed by the CFA system: an excessively rigid exchange rate regime, a problematic pegging to the euro, the underfinancing of African economies, and a free movement of capital that generates a massive financial bleed-out. Since 1948, the CFA franc’s parity with respect to its anchor currencies (first the French franc, today the euro) has been changed only once, during the 1994 devaluation. This means that some of the poorest countries in the world, such as Niger and the Central African Republic, for years have had to endure monetary policies tailored to suit the cyclical developments in very rich economies, first France and now the eurozone. It also means that the 15 member states of the franc zone taken individually do not have the possibility of using the exchange rate to cushion external shocks. The pegging of the CFA franc to the euro is problematic because an appreciation of the euro entails, for the countries of the franc zone, a reduction in the price competitiveness of their manufactured goods. The priority of the zone’s central bank is to ensure that there are sufficient foreign exchange reserves to defend the parity of the CFA francs against the euro. This means that they must limit the creation of money, that is, the domestic credit granted to governments, businesses and households. At the same time, it makes their imports cheaper and reduces the weight of their debt in dollars, hindering exports and favoring imports, which contributes to a deterioration of the trade balance.”
+ “The coming post-petroleum period will present a major economic challenge for Gabon, because the country has largely failed to use its abundant oil revenues to diversify into other forms of economic activity.” By Douglas A. Yates. Link. And read a PW essay by Daniela Gabor and Ndongo Samba Sylla about development agendas at the Gabon One Forest Summit. Link.
+ “After the failure of taxation, agriculture, and foreign aid, mining rent appears as the Nigerien state’s only remaining option to revive the development project disallowed by neoliberal reform.” By Rahmane Idrissa. Link. And Idrissa on the coup in Niger. Link.
+ “Radical activists in Burkina Faso insist on the (re-)nationalisation of subsoil and agricultural resources and of other economic sectors; professional education and industrialisation, so that the country would become independent from foreign capital and capable of benefitting from its value chains.” By Bettina Engels. Link. And Engels on Burkina Faso’s security crisis. Link.
ARIELLE BERNHARDT is a postdoctoral fellow at the MIT Department of Economics. In her job market paper, she explores the relation between caste, land, and colonialism.
From the abstract:
“This paper shows that caste norms are weakened when Hindus live alongside Adivasis, an indigenous minority outside of the caste system. Using a number of estimation strategies, including a historical natural experiment that led to local variation in Adivasi population share, we show that having more Adivasi neighbors decreases Hindus’ adherence to a wide range of caste rules. Hindu women in Adivasi-majority villages are 50% more likely to work and have substantially higher earnings. Individuals higher on the caste hierarchy are less likely to practice ‘untouchability’ towards those lower than them and villages are more likely to be integrated. We argue that Hindus adhere to caste norms as an investment in status within the caste system, and that this investment is less valuable when Adivasis—a lower-status out-group—form a larger share of the village population. Consistent with this explanation, caste norms are weaker in areas where British colonial policy led Adivasis to hold more land and political power, increasing the returns to social and economic interactions with Adivasis independent of their population share.”
Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: firstname.lastname@example.org.
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+ “Due to the fragmented nature of schools and districts, the financial mechanisms of the IRA threaten to reproduce underlying inequalities.” Also new on PW, David I. Backer on green investment for school infrastructure. Link.
+ A report from the Lowy Institute on “revitalising the green climate fund.” Link.
+ Megan Raby on the United Fruit Company’s efforts at agricultural diversification. Link.
+ “If China’s Boom is Over, Where Will Demand for Commodities Come From?” Jean van de Walle on industrial commodities and China’s infrastructure investment trajectory. Link.
+ “We found that two years after unionization, nursing homes were 31.1 percentage points more likely than nonunion nursing homes to report workplace injury and illness data to OSHA.” By Adam Dean, Jamie McCallum, Atheendar S. Venkataramani, and David Michaels. Link.
+ Ian G. Baird on “land concessions and postwar conflict in Laos.” Link.
+ Jeff Joseph reports on the labor struggles of Tamil Nadu’s purse seine fishers. Link.
+ Tobias Arbogast, Hielke Van Doorslaer, Mattias Vermeiren on the Federal Reserve’s growing skepticism towards the natural rate hypothesis. Link.
+ “A growing literature exists showing how environments characterized by risk, such as those with greater rainfall variability or earthquake risk, tend to foster higher levels of religious participation and belief. We show that risk associated with oil dependence facilitated the proliferation of religious communities throughout the US South during the twentieth century. In resource-rich settings, managing risk associated with volatility is central to enjoying their economic benefits. To study the relationship between natural resource risk and religious participation, we consider the US South, where oil abundance has contributed to both increased wealth and economic risk. Our main results confirm that Southern counties with known oil abundance exhibit higher rates of religious participation over the sample period.” By Andreas Ferrara and Patrick A. Testa. Link.
Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: email@example.com