Trade and Colonial Status

Does colonisation explain differences in trade performance across developing countries? In this paper, we analyse the differentialimpact of British versus French colonial legacies on the current trade of African ex-colonies. We initially find that former British colonies trademore, on average, than do their French counterparts. This difference might be the result of the relative superiority of Britishinstitutions. However, a core concern is the non-random selection of colonies by the British. Historians argue that with Britain,trade preceded colonisation. Using an instrument based on colonisation history to control for this endogeneity, we find noevidence of a systematic difference between the British and French colonial legacies with respect to trade. This finding suggeststhat the apparent better performance of British ex-colonies might be instead explained by pre-colonial conditions