Published by EH.NET (October 2006)

Jonathan Krieckhaus, Dictating Development: How Europe Shaped the Global Periphery. Pittsburgh: University of Pittsburgh Press, 2006. x + 251 pp. $28 (paperback), ISBN: 0-8229-5914-3.

Reviewed for EH.NET by Sylvain H. Boko, Department of Economics, Wake Forest University.

This book’s stated objective is to provide an answer to the “fundamental” question: “why do some countries achieve substantial and sustained economic growth while others do not?” According to Jonathan Krieckhaus, the conventional-wisdom answer includes the prescription that countries should adopt “market-friendly economic policies … [and] invest in education and health.” However, the book attempts to distinguish itself by adopting an approach focusing on how international events affect domestic economic growth. This approach is not in and of itself new. However, the book’s central thesis is that the key determinants of growth in developing countries are heavily influenced by their colonial legacy. Krieckhaus contends that Europe played a determinant role in shaping the institutions in its former colonies. Further, he argues that the structure and outcome of growth in former colonies have been dictated externally, for example, through wars, foreign aid, and the vagaries of international markets.

In a manner reminiscent of the Dependency Theory, Krieckhaus claims that “by far, the most effective route to economic success over the last forty years” is avoidance of European colonialism. The author gives the examples of Japan, Thailand, China, South Korea, and Taiwan, as cases of countries that have shown rapid growth since 1960, while managing to avoid European colonization. Krieckhaus states further that among the countries that were colonized by Europe, those that became colonies after 1885 suffered worse because, after that date, colonialism became more exploitative. Indeed, many readers might be shocked by the book’s conclusion that Europeans “did not attempt to build state capacity or invest in human capital; rather, they imposed states that inhibited property rights.” The suggestion is that European colonization worsened the initial conditions of underdeveloped countries, thereby largely negating their chances at rapid economic growth.

Krieckhaus conducts a three-level analysis showing that countries with high levels of European settlement, such as United States, Canada, and Australia, have also traditionally experienced high levels of growth. This is because when they settle in a territory, Europeans, who have “mastered the art of sustained increase in per capita GDP,” tend to establish a capitalist system based on respect for property rights, a liberal state, and investment in human capacity. Countries partially settled by Europeans, such as South Africa, Brazil, and Algeria, show a better growth performance than countries that were extractive colonies, although the benefits tend to be confined an elite minority. Finally, the worst performing countries tend to be those in Africa and Asia, where Europeans’ interests were to “conquer, plunder, and proselytize.”

To illustrate his points, the author focuses on three case studies: Mozambique, where the Portuguese excluded the Africans from acquiring skills conducive to modernization; South Korea, which had its 1,300-year history as a unified state to draw upon as it experienced modernization under Japanese colonial rule; and Brazil. Brazil’s particularity is that it was partially settled by Europeans, the result of which is the establishment of a dynamic capitalistic economy that encompasses a portion of the society, but which has been influenced by various international shocks all the same.

The author proposes a “reconceptualization” of the growth literature to account for the fact the “international system dictated” the pattern of development throughout the world through major shocks such as wars, market shocks and foreign aid. For example, empirical results in Table 4.8 augment the standard growth model by analyzing the effect of war and aggression on economic growth. The results are mixed, depending on whether wars are defined as “economically relevant” or are of external or internal sources.

Overall, the book tackles the very important, but complex, issue of the impact of European colonization on the development outcomes of countries today. I come away from reading the book with more questions than answers, however. It is not clear to me if the author is suggesting a neo-dependency theoretical approach to growth analysis or if this is just an augmented form of the standard growth theory approach. The use of the standard (and over-utilized) econometric growth model to illustrate the suggestion of a different paradigmatic understanding of the various patterns of growth around the world presents an analytical challenge not resolved in the book. The author’s call for a “holistic empiricism,” which involves the consideration of country-level specificity and history in growth analysis also presents methodological challenges for empirical work. In addition, it is not clear whether the insights obtained from this historical approach to understanding growth and development present any policy choices for policymakers in the countries involved. For example, should periphery countries sever their ties with Europe and the rest of the “international system” in order to optimize their chances of growth? And, despite the havoc wrought on countries’ resource bases by Europe’s brutal resource-extractive colonial policies, why have vast numbers of populations in Africa continued to wallow in poverty forty years after independence? Does European colonization sufficiently explain the types of growth-suffocating policies being implemented by countries around the world or the endemic corruption present in some countries?

These shortcomings notwithstanding, the book’s attempt to deconstruct suggestions that colonization was a “civilizing” enterprise for Europe is to be applauded.

Sylvain Boko is the author of Decentralization and Reform in Africa (Kluwer, 2002).