"Indigenous" institutions and colonial origins of development

In a new World Bank working paper, Cambridge historian CA Bayly offers a revision of the "colonial origins of comparative development" story (link to paper). Contrasting Indian and African colonial experiences, Bayly notes that Indian commercial and knowledge institutions were quite sophisticated before the arrival of colonists. Indian elites were thus well-prepared to adapt for their own purposes institutions and practices introduced by the colonists. The British colonists would also employ many locals in administration; eventually Indian administrators would be employed throughout the British empire. As such, the colonial experience did more to boost development capacity in the Indian colonies than in the African colonies. Revising the Acemoglu et al line of reasoning, social conditions as much as environmental conditions that explain the difference in the extent to which institutional transfer succeeded, at least in these cases.

Bayly does not offer a theory of why "indigenous" social conditions were so different in the two regions, but he cites others who discuss ecological factors that favored dense, sedentary agriculture in many parts of India versus more expansive and mobile agriculture throughout Africa. So in a way we are back to ecological factors, but with social consequences in pre-colonial times as intervening factors.

Bayly's contribution is useful in providing clear examples of how the success of "interventions"---in this case, colonial institutional transfer---depend on the recipient social environment. On the one hand, there is some danger here of inspiring people to rush to ad hoc judgments about whether recipient social environments were well-suited to absorb innovations in other cases. On the other hand, it would be similarly foolish to disregard the potential constraints associated with low "absorption capacity" of recipient social environments. Grist for the mill...