Africa and Social Capital: From Human Trade to Civil War *

Introduction We argue the common theme in Africa's underdevelopment were constant declines in social capital. In doing so we provide brief historical backgrounds on the impact of the slave trade, colonialism, and post-independence civil war on the current underdevelopment of Africa. Whether the blame should be placed on slave trade, European colonization, or poor governance has yet to be determined. However, all these factors have played major roles in Africa's underdevelopment. The slave trade era, which lasted from 650 to 1900, devastated Africa by creating internal slave raids between and within ethnic groups. These internal raids negatively affected social structure and may be the cause of the ethnic fractionalization seen today. The height of European colonization began at the end of the 19th century and ended in 1979 with the independence of Southern Rhodesia (Zimbabwe). During this period, Africa was divided into multiple countries without accounting for its already fragile social structure. Depending on whether the colonizers were interested in settling or in resource extraction, the effect can be seen today. After colonization the continent was plagued with poor governance and civil wars. Civil wars were especially disruptive of productive economic activities. Social capital is a term encompassing societal structures and norms that facilitate trust, cooperation, better governance, and viewed as a necessity for economic prosperity (Bourdieu 1980; Dinda 2008; Fukuyama 2001; Poder 2011, Portes 2000; Widner and Mundt 1998). Coleman (1988) exemplified social capital as entities with some aspect of social structures that helps facilitate certain actions of actors within the structure and without its resources achieving certain ends were not possible (Lin 1995, Coleman 1988). Coleman stressed its development through obligation, expectations and trustworthiness in a community. Putman (1993) defined socials capital as features of community such as trust, norms and networks that can improve the efficiency of coordination in society, and cooperation was easier for societies with a substantial stock of social capital. Fukuyama (2001) defined it as instantaneous norms that promote cooperation and indicated its importance for an efficiently functioning modern economy. He suggested that unlike economic policies or institutions social capital cannot be easily created and that it is a byproduct of religion, tradition, shared historical experience, and other factors outside government control. Further, governments have the greatest direct ability to generate it through education, with social capital also being an externality of human capital. Social capital facilities cooperation, reduces transaction costs from asymmetric information, and facilitates economics growth (Aglan and Cahuc 2010; Bj0rnskov 2012; Knack and Keefer 1997; Zak and knack 2001). Dinda (2008) stated "social capital truly greases the wheel that allow nations to advance smoothly and creates the base for economic prosperity." Helliwell and Putman (1995) indicated that disparities in economic prosperity were due to the level of endowments of social capital. Rapasingha et al. (2000) found a positive association with social capital, measured by civic engagement such as voting, on per capita income growth. Woolcock (1998) stated that civic engagement together with the organization of society are key determinants of whether a country succeeds or fails in development. Robinson and Schmid (1994) suggested the main cause of economic and social failures which includes wars, crime, and disinvestment in institutions were due to lack of social capital. Temple (1998) indicated that the reason for economic development failures in Africa were due to low social capital, bad policy outcome, and low investment. Nunn (2007, 2008) stated that the possible explanation of Africa's underdevelopment was its history of extraction, characterized by the slave trade and colonialism. …