Current economic growth of previous colonies attributed to colonial powers

Review of Economic Studies

A research conducted by the Review of Economic Studies analyses economic activities in previous colonies organized by colonial powers. The study concludes that positive impacts of such economic activities.

For their research, the team investigated the Dutch civilization system. Sugar Factories which were built by Dutch colonizers in the nineteenth century are more developed today. From the early 1830s until 1870s production of agricultural sugar formed the center of interest for the Dutch colonial enterprise in Java, an island in present day’s Indonesia. Java which was core to the Dutch colonial empire activities forced the island peasants to cultivate sugar. The sugar production was undertaken in sugar factories started by the Dutch and the produce was then exported to Europe. Reports suggest that the revenue produced via this medium records Java as one of the most lucrative colonies.

The research team points out two significant changes made by the Dutch to the Economy of Java- they repurposed land and reorganized the surrounding villages in order to supply labor. The research team studies the impact of these changes on the current data and long-run institutions. Reports concluded that people who live within a radius of a few kilometers from the colonial sugar factories were more likely to be employed than people who lived away. The per-capita consumption of such households was allegedly about 10 percent higher than those living more than 10 kilometers away. Furthermore, records suggested that people were economically better off from the vicinity of colonial extraction.

The research inferred that colonial powers were known to organize their colonies in order to gain maximum returns for themselves. “While the previous literature has mostly emphasized potential negative consequences, this study shows that the creation of colonial manufacturing industry in rural Java by the Dutch in the 19th century led to a more modern economy. Today, places near historical Dutch sugar factories are more industrialized, have the more public infrastructure, and the population living nearby has higher levels of schooling and is richer than people living near plausible counterfactual sites for the Dutch factories,” recorded the lead author, Melissa Dell, in a statement.