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KIER DISCUSSION PAPER SERIES KYOTO INSTITUTE OF ECONOMIC RESEARCH Discussion Paper No. 762 “Colonial Experience and Postcolonial Underdevelopment in Africa” Nobuhiro Mizuno and Ryosuke Okazawa April 2009 KYOTO UNIVERSITY KYOTO, JAPAN Colonial Experience and Postcolonial Underdevelopment in Africa Nobuhiro Mizuno Ryosuke Okazawa February 23, 2009 Abstract In this paper, we analyze the connection between the history of colonial rule and postcolonial development in Africa. We focus on the fact that many African colonies were governed by indirect rule. Under indirect rule, indigenous people are divided into two groups: a privileged ruling group and an unprivileged ruled group. Our model assumes that the ruled group cannot observe how their deprived re- sources are divided between the metropolitan ruler and the ruling group. In this economy, a large level of exploitation by the metropoli- tan ruler yields distrust among indigenous groups and creates a neg- ative effect on postcolonial economic and political development. Keywords: Africa, colonialism, indirect rule, colonial legacies, ethnic conflict JEL Codes: D74; N47; O10 We are grateful to our advisers, Akihisa Shibata and Kazuhiro Yuki, and an anony- mous referee for helpful comments and suggestions. We also would like to thank Masahisa Fujita, Shingo Ishiguro, Katsunori Yamada, Daishin Yasui and participants of the Japanese Economic