We argue the common theme in Africa's underdevelopment were constant declines in social capital. In doing so we provide brief historical backgrounds on the impact of the slave trade, colonialism, and post-independence civil war on the current underdevelopment of Africa. Whether the blame should be placed on slave trade, European colonization, or poor governance has yet to be determined. However, all these factors have played major roles in Africa's underdevelopment. The slave trade era, which lasted from 650 to 1900, devastated Africa by creating internal slave raids between and within ethnic groups. These internal raids negatively affected social structure and may be the cause of the ethnic fractionalization seen today. The height of European colonization began at the end of the 19th century and ended in 1979 with the independence of Southern Rhodesia (Zimbabwe). During this period, Africa was divided into multiple countries without accounting for its already fragile social structure. Depending on whether the colonizers were interested in settling or in resource extraction, the effect can be seen today. After colonization the continent was plagued with poor governance and civil wars. Civil wars were especially disruptive of productive economic activities.
Social capital is a term encompassing societal structures and norms that facilitate trust, cooperation, better governance, and viewed as a necessity for economic prosperity (Bourdieu 1980; Dinda 2008; Fukuyama 2001; Poder 2011, Portes 2000; Widner and Mundt 1998). Coleman (1988) exemplified social capital as entities with some aspect of social structures that helps facilitate certain actions of actors within the structure and without its resources achieving certain ends were not possible (Lin 1995, Coleman 1988). Coleman stressed its development through obligation, expectations and trustworthiness in a community. Putman (1993) defined socials capital as features of community such as trust, norms and networks that can improve the efficiency of coordination in society, and cooperation was easier for societies with a substantial stock of social capital. Fukuyama (2001) defined it as instantaneous norms that promote cooperation and indicated its importance for an efficiently functioning modern economy. He suggested that unlike economic policies or institutions social capital cannot be easily created and that it is a byproduct of religion, tradition, shared historical experience, and other factors outside government control. Further, governments have the greatest direct ability to generate it through education, with social capital also being an externality of human capital.
Social capital facilities cooperation, reduces transaction costs from asymmetric information, and facilitates economics growth (Aglan and Cahuc 2010; Bj0rnskov 2012; Knack and Keefer 1997; Zak and knack 2001). Dinda (2008) stated "social capital truly greases the wheel that allow nations to advance smoothly and creates the base for economic prosperity." Helliwell and Putman (1995) indicated that disparities in economic prosperity were due to the level of endowments of social capital.
Rapasingha et al. (2000) found a positive association with social capital, measured by civic engagement such as voting, on per capita income growth. Woolcock (1998) stated that civic engagement together with the organization of society are key determinants of whether a country succeeds or fails in development. Robinson and Schmid (1994) suggested the main cause of economic and social failures which includes wars, crime, and disinvestment in institutions were due to lack of social capital. Temple (1998) indicated that the reason for economic development failures in Africa were due to low social capital, bad policy outcome, and low investment.
Nunn (2007, 2008) stated that the possible explanation of Africa's underdevelopment was its history of extraction, characterized by the slave trade and colonialism. Using slave exports data from 1400-1900 he found the slave trade era had negative effects on economic development of African countries. In addition, the most productive regions of Africa were the ones that experienced the majority of the slave trade. Nunn (2007) showed that African countries that experienced the slave trade and colonialism fell into a state dominated by unproductive activities and the persistence of these unproductive norms will make it difficult for a productive equilibrium to be reached. The unproductive activities were due to external demand for slaves that dominated many African economies. Nunn and Wantchekon (2011) found the slave trade developed a culture of mistrust in countries affected by it, measured by the relationship of ethnic groups who experienced slave trade and their view on their local governments today. Explanations were that the slave trade brought about kidnappings across ethnic groups, neighbors, friends, and family members.
Similarly to Nunn's work using historical data from 1400-1900 to show factors contributing to Africa's current economic struggles we provide evidence that the common theme of Africa's current economic difficulties were due to constant downward spirals of social capital dating from the slave trade era. Apart from the rich literature of resource rent seeking and its effect on post-independence civil wars in Africa, we also provide evidence that the loss in social capital dating from the slave trade is an important factor in explaining the post-independence civil wars in Africa. Civil wars are especially damaging to economic growth as society resorts to economically unproductive activities. Further, civil wars aid in diminishing social capital, thus, making the transition to economically productive activities difficult.
Prior to the slave trade African kingdoms had well developed economic and social structures, which encouraged Europeans to first trade for material goods. Later as slave trade became in high demand, it resulted in kingdoms procuring slaves through violent means. At times wars were created for the sole purpose of capturing slaves. The economic viability of the slave trade led families, neighbors, and friends to sell each other into slavery. Freeborn civilians, those protected by law from slavery, also became available for slavery. The slave trade resulted in the disintegration of formally prosperous kingdoms. The constant wars and slave raids then diminished social capital between ethnic groups and persisted through colonialism.
Prior to the Slave Trade
Africa's economic history was believed to be non-existent prior to the trans-Atlantic slave trade due to the extent that much of Africa's economic past were written by non-historians (Cohen 1971). It was not until the 1950s that there was largely a realization of Africa having a history of importance before the arrival of Europeans. The lack of prior records led some scholars to believe that Africa was a "non-economic man" (Cohen 1971, p. 210). Meaning that Africa lacked the ability for production, labor organization and industrialization, which are considered bottlenecks to economic development. Fortunately, the notion of a "non-economic man" ceased with intensive revisionist studies. Newfound records from the slave trade era, which lasted from the early 7th century to the end of 19th century has helped dismiss this notion of a "noneconomic man (1)." Also, comparable records have been found that by the 15th century many African kingdoms had long standing histories and were as prosperous as the rest of the world, measured by urbanization (Nunn 2007 p. 169; Bairoch 1988 p. 55; Rodney 1982, p. 69).
Prior to their involvement in the trans-Atlantic slave trade (1472-83), the Portuguese sailed along the south of West Africa looking for capable traders. After finding the Kingdom of Kongo (2) they were able to sustain trade due to their strong centralized government and well-developed market systems (Nunn 2007). The Kingdom of Kongo had six provinces: Soyo, Mpemba, Mbamba, Mpaungu, Mbata and Nsubi that were governed by delegates sanctioned by the King. The Government received its revenues through income taxes paid once a year and through labor services. Control of the currency solely resided in the power of the King, a unique situation in Africa (Vansina 1966, p. 44). Even after the slave trade era began, European countries still had preferential trade agreements with parts of Africa that were well developed (3). During King Afonso's reign (1509-43), a period in which slavery had already been well established; copper and ivory were still being traded. By as early as 1508, young scholars including the King's son were being sent to study in Lisbon with payments being made in slaves and copper anklets (Vansina 1966, p. 47; Heywood 2009).
The Senegambia (4) zone, located in a tropical zone between the Sahel and the forest of Guinea, had an established decentralized governing system with several states of varying sizes by the end of the 15th century. For example, the Denyanke Kingdom controlled the regions of the middle and upper valleys of the Senegal River, while the Jolof Confederation controlled the region between the Senegal River and the Gambia River (5). Before the trans-Atlantic slave trade began, trade was well established in Senegambia. The leading interest of trade for the Portuguese was gold and spices (Barry 1998, p. 39).
During the Slave Trade
Africa faced four slave trades from 650 to 1900. The trans-Saharan slave trade from 650 to 1600 had an estimation of 4,820,000 slaves traded. The Red Sea slave trade from 800 to 1600 had an estimation of 1,600,000 slaves traded. The East African slave trade from 800 to 1600 had an estimation of 2,400,000 slaves traded and the trans-Atlantic slave trade from 1450 to 1900 had an estimation of 11,698,000 slaves traded (Lovejoy 1983). This accumulates to 20,518,000 slaves traded in the 1,250 years of slavery record...