How Colonial Rubber Concessions Harmed Development but Strengthened Local Trust

📍 What was studied

This paper investigates the long-term development effects of colonial-era rubber concessions in the north of the Congo Free State. The concessions were arbitrarily bounded and combined private resource extraction with indirect rule and violence. The design uses these arbitrary concession borders to identify causal effects of that economic and political arrangement on present-day outcomes.

🧭 How the comparison was set up

• Exploits arbitrarily defined borders of historical rubber concessions in the Congo Free State to create a credible quasi-experimental comparison.
• Collects modern survey and experimental data from individuals living near a former concession boundary to probe mechanisms behind persistent differences.

📊 Key findings

• Historical exposure to the concessions causes significantly worse outcomes today on multiple development margins:
• Lower education attainment
• Lower wealth measures
• Worse health indicators
• Local political institutions in places inside former concessions show clear legacies:
• Village chiefs provide fewer public goods
• Chiefs are less likely to be elected and more likely to be hereditary
• Social and cultural outcomes inside former concessions run in the opposite direction:
• Higher interpersonal trust
• Greater social cohesion
• Stronger support for income sharing

🔎 How these pieces fit together

The pattern suggests that the concession system altered both formal institutions and social norms in ways that can substitute for one another: weak or extractive local institutions coexist with stronger communal trust and sharing norms. These institutional and cultural legacies help explain why colonial economic organization continues to shape education, wealth, and health generations later.