The complex effects of colonial rule in Indonesia
The areas of Indonesia where Dutch colonial rulers built a huge sugar-producing industry in the 1800s remain more economically productive today than other parts of the country, according to a study co-authored by an MIT economist. The research, focused on the Indonesian island of Java, introduces new data into the study of the economic effects of colonialism. The finding shows that around villages where the Dutch built sugar-processing factories from the 1830 through the 1870s, there is today greater economic activity, more extensive manufacturing, and even more schools, along with higher local education levels. “The places where the Dutch established [sugar factories] persisted as manufacturing centers,” says Benjamin Olken, a professor of economics at MIT and co-author of a paper detailing the results, which appears in the January issue of the Review of Economic Studies. The historical link between this “Dutch Cultivation System” and economic activity today has likely been transmitted “through a...