False economy What’s in it for me? Understand what makes the

Extractive institutions leave an enduring 
legacy.
We’ve seen how inclusive institutions develop 
over time. Extractive institutions the world over 
are similar; historical forces not only fashion 
them, but effectively prolong and perpetuate 
them.
This can be most clearly seen in the institution of 
slavery and its persistent historical influence.
Slavery had existed in Africa prior to the arrival 
of European colonizers in the seventeenth 
century. They were on the hunt for forced labor 
to toil in sugar plantations in the New World.
Once slavers started arriving in Africa, local 
rulers realized they could make a fortune selling 
slaves to them. Consequently, enslavement 
massively increased. War captives and criminals 
found themselves enslaved en masse. In some 
communities, slavery also became the only form 
of punishment.
In return for these slaves, as well for valued 
items such as cotton, traders imported weapons 
to Africa from Europe. Of course, all this did was 
further incite violent tendencies among African 
tribes.
Even though the global slave trade technically 
ended in 1807, slavery continued in Africa. It’s 
just that slaves were now commodities forced to 
work in the continent of Africa, producing for 
both internal and export markets.
Nor was that the end. Even though African 
independence movements were met with great 
success in the second half of the twentieth 
century, extractive institutions established by 
colonizers persisted.
Take Sierra Leone. It was a British colony from 
the early nineteenth century to 1961. The British 
appointed local Paramount Chiefs to rule on the 
British monarchy’s behalf.
Nowadays, Paramount Chiefs are elected for life 
by the Tribal Authority, a tiny unelected political 
body. Only members of a few aristocratic 
families – as originally prescribed by the British – 
are themselves eligible to become Paramount 
Chiefs.
That is to say, the political system is as highly 
extractive as it ever was.
The same is true of the economic system. In 
1949, the British established the Sierra Leone 
Produce Marketing Board. This promised to 
protect farmers from price fluctuations. The 
catch? Just a “small” fee. Of course, this 
ballooned to around half a farmer’s income by 
the mid-1960s.
Independence failed to bring this practice to an 
end. In fact, under Siaka Stevens, who became 
the prime minister in 1967, the farmers were 
forced to hand over 90 percent of their income in 
tax!
The logical question is: Why didn’t these 
institutions just collapse after independence? 
Let’s investigate in the next blink.