Colonialism and inequality

Maybe inequality between nations is less about the present than the past? So argues Glasgow economist Luis Angeles in a new article in the July 2007 issue of the European Economic Review. His article, Income inequality and colonialism, says that "colonial history is a major explanatory factor" behind today’s large differences in inequality among the world’s countries:

This paper proposes that colonialism is a major explanation behind today's differences in income inequality across countries. We argue that income inequality has been higher in the colonies where the percentage of European settlers to total population was higher, as long as Europeans remained a minority. The countries where Europeans became the majority of the population did not suffer from high inequality. These initial differences continue to hold today. The empirical evidence we provide strongly supports our thesis.

At the moment the paper is available on SSRN (though that may not last). An ungated version was published as University of Manchester Economics Discussion Paper EDP-0543 (PDF).

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