The Institutional Origins of Inequality in Sub-Saharan Africa

Abstract

This article provides a political explanation for the unexpectedly high levels of income inequality found in the African region today. Traditional explanations for inequality are reviewed and found not to be compelling. Instead, it is argued that natural endowments in the region shaped the nature of colonial institutions, which in turn created the conditions for the high levels of inequality found today. The surprisingly high levels of inequality in Africa can be understood as resulting from a process of class formation linked to dynamics of state building that have their origins in the economic institutions of the early colonial state. Insofar as political power has often been used to gain economic advantages during the postcolonial era, inequality has changed little over the past 40 years, despite the official focus on development and poverty alleviation by donors and governments alike.