Slavery, Economic Freedom & Income Levels in the Former Slave-Exporting States of Africa

Abstract

This paper investigates the relationships among slavery, economic freedom and economic development across former slave-exporting states in Africa, using country-level slave export data from Nunn (2008a), the Fraser Institute’s Economic Freedom of the World index, and per capita real GDP from the Maddison Project database. Recent studies document a negative link between slavery and present-day income. This study takes an additional step, aiming to connect slavery, institutions, and economic performance by testing whether the early institutions of slavery work through current institutions to affect modern incomes. I attempt to support this relationship using slave exports as an instrument for institutions in 2SLS income regressions. Results demonstrate a strong, positive relationship between economic freedom and present-day income. Further, based on tests of over-identifying restrictions, I cannot safely reject instrument validity. These findings, taken together, suggest that institutions likely serve as a conduit for the influence of slavery on incomes today.