Colonial Trade and Price Gaps in French Africa Federico Tadei∗ A common explanation for current African underdevelopment is the extractive character of institutions established during the colonial period. Yet, since colonial extraction is hard to quantify, the magnitude of this phenomenon is still unclear. In this paper, I tackle this issue by focusing on colonial trade in French Africa. By using archival data on export prices, I provide new yearly-estimates of colonial extraction measured as the gap between prices to Africans and in the world market. The results show that African prices were substantially lower than world market prices: colonial trade dynamics was characterized by a considerable amount of extraction. JEL Classification: N17; O43 Keywords: Africa, Development, Extractive Institutions, Colonization, Trade, Price Gaps ∗IGIER- Bocconi University. Via Roentgen 1, Milan 20136, Italy. Email:
[email protected]. A previous version of this paper was circulated with the title Extractive Institutions and Gains from Trade: Evidence from Colonial Africa. I would like to thank my advisor Jean-Laurent Rosenthal for his guidance. I also thank Jonathan Chapman, Jean Ensminger, Phil Hoffman, Nathan Nunn, Erik Snowberg, Matt Shum, and the participants to the Caltech HSS Proseminar, Caltech Social Science-History Lunch, All-UC Economic History Workshop at UC Berkeley, UCLA Economic History Proseminar, European Economic Association Conference at Toulouse, African Economic History Workshop at LSE, and American Economic Association Meeting in Boston for their helpful comments. I Introduction Many leading hypotheses about current African underdevelopment emphasize the role of colonialism. If the early literature underlined how colonial rule relegated Africa to exporter of primary commodities [Rodney, 1972], more recent works have instead focused on the long-term consequences of colonial extractive institutions [e.g.