Proposal preview

Colonial financial markets in the long 18th century: a source of underdevelopment?

The underdevelopment of financial markets in today’s developing countries probably has its roots in their colonial past. Financial markets are considered key to the long-term development of various economic leaders in history and it is therefore important understand the institutional aspect of financial markets for developing countries today (Banerjee and Duflo, 2011; Acemoglu Johnson and Robinson (AJR) 2001; Acemoglu and Robinson 2012). More specifically, only a few financial revolutions exist in history. These propelled the economies of The Dutch Republic, Great Britain, the United States and Japan onto paths of exceptional growth (Sylla 2002, 2006). These financial revolutions all built on the experiences of other countries: the English learned as much from the Dutch, as they had learned from their Italian and Antwerp predecessors (Dickson 1967; Tracy 1985; Homer and Sylla, 2005). The transfer of financial skill appears to play an important part in the development and progress of these financial markets. Yet, this transferability appears limited to the European experience or its off-shoots also known as settler colonies, with the notable exception of Japan. This is an odd phenomenon, especially when the exchange of ideas and technological skill around the globe is considered (Mokyr, 2017; Davids, 2013).

This session extends the discussion about the importance of financial techniques and its transferability to the colonies of the European powers, most notably Great Britain and the Dutch Republic. This extension is a logical step following AJR’s distinction between settler and non-settler colonies in the transplantation of European institutions. If the colony was a non-settler colony, they argue, extractive institutions were put in place. If it was a settler colony, more inclusive institutions appeared. The focus of this and subsequent studies, focused on macroeconomic outcome variables like GDP growth. What research, on these institutional effects, have failed to study are financial institutions and how it transferred from colonizer to colony. The extent to which financial markets were influenced by the type of colonial institutions remain unclear. For example, Java is considered an extractive colony of the Dutch during the eighteenth century. Yet, research on the financial markets show that the Dutch adapted to local systems to enhance trade and ensure they could obtain the desired commodities. Another case is the Cape Colony, a colony between the two extremes of settler and extractive. Here, informal credit markets were directly transferred and changed to suit the economic environment. This session purposes to examine and compare the development of financial markets between these colonial types.

The aim of this session is to bring together scholars of colonial financial markets to discuss how the colonizer and the type of colony influenced the transfer of financial markets to these colonies. These markets can include but is not limited to money markets, informal and formal credit markets, and bond markets. The session proposes to investigate not only the formal financial markets of colonial debt and international transfers between colony and colonizer, but also the informal markets between settlers and the indigenous populations of the colonies.


  • Christie C Swanepoel, University of Western Cape,, South Africa
  • Alberto HA Feenstra, University of Amsterdam,, Netherlands
  • Farley F Grubb, University of Delaware, , United States

Session members

  • Christie C Swanepoel, University of Western Cape,
  • Alberto HA Feenstra, University of Amsterdam,
  • Farley F Grubb, University of Delaware,
  • Peter PAE Koudijs, Stanford University,
  • Abe A de Jong, Erasmus University Rotterdam ,
  • Tim T Kooijmans, Monash University,
  • Benjamin B Huf, University of Sydney,

Proposed discussant(s)

  • Christiaan C van Bochove, Raboud Universiteit,
  • Karin K Pallaver, University of Bologna,
  • , ,

This panel has Call for Papers open.
If you are interested in participating, please contact the panel organizer(s) to submit a proposal.

  • Christie C Swanepoel, University of Western Cape,, South Africa
  • Alberto HA Feenstra, University of Amsterdam,, Netherlands
  • Farley F Grubb, University of Delaware, , United States