Legal Studies Research Paper Series Paper No.

1744

Colonialism, Foreign Investment and

Property Rights Reconsidered

Jason Yackee

This paper can be downloaded without charge from the

Social Science Research Network Electronic Paper Collection at:

https://ssrn.com/abstract=4063251
 Colonialism, Foreign Investment and Property Rights Reconsidered

Jason Yackee *

Paper presented at the 79th Annual Midwest Political Science Conference, Apr. 7-Apr. 10,
2022, Chicago

Abstract: In an article in IO, now somewhat old but still regularly cited, Professor Jeffrey Frieden
(1994) imaginatively presented European colonialism as resolving what has become known as the
“credible commitment” problem in the IPE literature on foreign investment. Frieden claimed that
colonialism’s aim or function was to prevent expropriation of metropolitan investment. I revisit
Frieden’s provocative interpretation, arguing that it gets things wrong—both about colonialism and
investment. The better interpretation highlights themes associated with the school of historical
rather than of rational institutionalism: the role of subjective ideas; of path dependence, and of
unintended consequences. Through a close examination of French colonialism in Africa I show
that the problem of credible commitment was both subjectively and objectively absent, and that
patterns of colonial investment are better explained as a function of material factors, then-
dominant economic beliefs and ideas, and the French government’s policy interventions and
abstentions. The investment story of French colonialism in Africa is about the relative lack of
private investment—arguably due, at least in part, to an excess of rights, allocated to the wrong
people and of the wrong type—even in those sectors of the economy that Frieden suggests are most
sensitive to the colonial resolution of credible commitment problems.

*
J.D., Ph.D. Professor of Law, University of Wisconsin-Madison. I would like to thank ______ for helpful comments.
jyackee@wisc.edu.

1
 The conquest of the earth, which mostly means the taking it away from those who have a
different complexion or slightly flatter noses than ourselves, is not a pretty thing when you
look into it too much. What redeems it is the idea only. An idea at the back of it; not a
sentimental pretence but an idea; and an unselfish belief in the idea—something you can
set up, and bow down before, and offer a sacrifice too…”

-Joseph Conrad, Heart of Darkness

Most scholars of the last round of European colonialism view the colonial project as hypocritical
tragedy. Metropoles ostensibly dedicated to liberal, humanistic democracy built and profited from
a system of despotic governance and inhuman exploitation. The tragedy is nicely if gruesomely
symbolized by the Congo Free State’s baskets of human hands, severed from native men, women,
and children unable or unwilling to meet their rubber quotas. In a remarkable article, now
somewhat old but still regularly cited in the international political economy (IPE) literature,
Professor Jeffrey Frieden (1994) imaginatively presented colonialism in a more positive light.
Frieden’s article appeared in International Organization, his field’s flagship journal, and it stands as
one of the very few articles on colonization that IO has ever published. 1

Through what he called a “new interpretation” of the secondary historical material, Frieden
provided a rare rational-institutionalist alternative to more familiar Marxist-Leninist theories of the
relationship between colonialism and private capital. In Frieden’s reading, colonialism was about
resolving a supposedly “primordial” problem of property (or contract) rights: the threat that the
colonized would opportunistically seize the assets and income streams of metropolitan foreign
investors. 2 Colonization protected those rights, and encouraged desirable foreign investment, by
replacing native with metropolitan rule. Metropolitan rulers were presumably less likely to
expropriate their own investors’ capital once it had been sunk abroad.

Frieden’s theory was (and remains) provocative because it implicitly encouraged the reader to view
the victims of colonization as actual or incipient rights-violators themselves, and of colonization as
not just understandable but perhaps also somewhat justifiable as a rights-securing enterprise.
Surprisingly, despite the provocation, Frieden’s theory has attracted little sustained challenge over
the years. Scholars continue to cite it, but benignly and without any real critical instinct. The lack
of critical engagement may be because Frieden’s underlying credible-commitment theory of foreign
investment, based on then-fresh ideas in the new institutional economics of Oliver Williamson
and Douglass North, has become ubiquitous. Frieden’s theory, viewed through the years, seems
merely an early statement of what is now virtually unquestioned conventional wisdom.
The lack of engagement may also be due to Frieden’s precocious deployment, unusual in IPE
scholarship at the time, of an explicitly historical methodology that lies outside of the normal

1
A search of IO in JStor for “colonial” in the title or abstract returns just 17 hits, most of which are only tangentially
related to colonialism.
2
As is typical in this literature, Frieden conflates rights arising from contract and those arising from property.

2
training of political scientists. 3 Foundational qualitative work on the political economy of foreign
investment, such as Vernon (1971), Moran (1974), or Lipson (1985), engaged with the past, but
their historical craft was amateurish and impressionistic. Frieden didn’t conduct any archival
research, but he did seem to engage much more systematically and rigorously with secondary
sources consisting of real academic history.

In this article I use a close examination of French colonialism in Africa to argue that Frieden’s
article gets things wrong, both about colonialism and investment. I focus largely (but not
exclusively) on French Equatorial Africa (AEF), referred to informally as the French Congo. 4 I
argue that patterns of colonial investment are better explained by a combination of material and
ideational factors and institutional choices that had little to do with credible commitment
dynamics or concerns. By ideational factors I mean ideas held by individuals associated with the
colonial movement about what kinds of colonial investments might be profitable or desirable. The
decision to invest was embedded within a particular understanding of the opportunities and
challenges of profiting from Africa and of the appropriate economic relationship between
metropole and colony.

That understanding prioritized the promotion of a complementary trading relationship, in which

the colonies would supply raw materials to metropolitan industry in exchange for metropolitan
manufactured goods. The theory was essentially one of trade, with public investment in
infrastructure and other public goods playing a key supporting role. Private investment, while
potentially desirable, was also inhibited both by the economic realities in Africa and by
institutional choices made by the French government. My reading of the historical record
highlights themes that we would today tend to associate with the school of historical rather than of
rational institutionalism: the role of subjective ideas; of path dependence, where early institutional
choices lock in place inefficient institutional arrangements, and of unintended consequences. 5

3
For a call for more historical work in the field of international investment law, see Yackee (2018). See also Büthe
(2002), who calls for political scientists to “model history” through the articulation of dependent and independent
variables and causal mechanisms while using historical “narratives as evidence.” Roberts (2006) claims that
international relations theory has in fact made a “turn to history.” However, modern scholarship on foreign
investment, political risk and the like has, at least since Kobrin (1984), been dominated by statistical studies that tend
to ignore history, except as reflected in quantitative data (usually collected by others) or to present it in capsulated
anecdotal form, based upon summary digestions of an unprincipled smattering of secondary or tertiary works, and for
the limited purpose of illustrating the plausibility of their interpretations of their quantitative findings. This is true
even of the best recent scholarship, such as Wellhausen (2016), which tacks on to the end of a mostly statistical study a
chapter self-conciously presented as historical, but which relies mostly on citations to older works of political science,
like Lipson (1985).
4
In the interest of space, I do not discuss investment in France’s Indochinese colonies. However, the historical
literature suggests a story similar to the one I tell here: that private French investment was scarce and slow in coming, a
situation exacerbated by material conditions and unfortunate government policies. See, e.g., Laffey (1976).
5
Historical institutionalism has been around for some time, and what it is, or aims to be, and its advantages and
disadvantages compared to other methods, are well-enough known to make an extensive literature review, of which
numerous now exist, unnecessary. For recent overviews, see Ahmed (2015); Orfeo (2011); Capoccia & Kelemen
(2007).

3
I focus on France because it is one of the two major colonizers of the late 19th and 20th centuries,
and because Frieden’s account largely ignores it. But a general theory of colonization must surely
be capable of explaining one of the two major cases of the phenemona of interest. More generally,
my interest in revisiting Frieden’s “reinterpretation” after all these years is driven by my concern,
which I have explored in past research, that modern IPE scholarship exaggerates the centrality of
credible commitment concerns to investor-state relations (Yackee 2011; 2009; 2005). Credible
commitment has become an endelessly repeated just-so story. It purports to explain, and by
implication justifies, contestable institutional choices that limit state sovereignty. The ballooning
literature on investment treaties is symptomatic. 6 Frieden’s article, as one of the earliest to apply
the theory in an IPE context, stands at the foundation.

Colonialism and Foreign Investment

Marxist-Leninists have long argued that colonialism and the interests of capital were intertwined.
Colonies were needed to absorb excess production; or they were sources of cheap inputs in an
exploitative “world system” in which resources were transferred from periphery to core. In this
traditional telling, the capitalist interest in colonialism appears in an unfavorable light. Frieden’s
innovation was to cleverly shift our perspective in a way that makes the capitalist interest, and
colonialism, seem more deserving of sympathy. 7 Colonialism is a response to the risk of
expropriation of foreign investment by the to-be-colonized state. By eliminating the host state,
colonization eliminates the risk and thus encourages foreign investment flows. Frieden is non-
committal on the question of causality; colonialism may have been caused by the functional
imperative of protecting metropolitan investment abroad, or such investment may itself have been
caused by the fact that colonial rule just happened to resolve the opportunism problem. In either
case, Frieden expects to find an empirical “association” between colonialism and investment.

Frieden’s theory was drawn from the new institutional economics, which emphasizes the security
and stability of rights as essential to the promotion of private economic activity. It is particularly
concerned with the problem of non-simultaneous exchange. 8 In that framing, foreign investment is
typically understood as a cooperative venture between the investor and the state hosting his
investment in which the investor performs first by sinking his investment. The investor’s central

6
For representative examples, see Allee and Peinhardt (2014); Haftel and Thompson (2013); Elkins, Guzman and
Simmons (2006); For a critical view that emphasizes the treaties as a result of states’ “bounded rationality,” an
approach that has some affinities with my own, see Poulsen (2015).
7
While Frieden certainly isn’t a Marxist, his theory has an apparent antecedent in Rudolf Hilferding’s (1910) Marxist
explanation of colonialism. Hilferding, whom Frieden does not cite, observed that “[w]hen one invests abroad in a
railway, or acquires a plot of land, or installs a port, or opens up and exploits a mine, the risk is much greater than
when one contents himself to buying and selling merchandise.” Hilferding’s idea of “risk” seems at least somewhat
analogous to what we might call “political risk” today (itself a vague concept which nonetheless probably includes the
risk of opportunistic expropriation). Hilferding thought that in the face of such risk foreign investors would resort to
violence to break apart the host state’s social and political order, replacing it with colonial rule and economic
monopoly. On conceptual and empirical problems with “political risk,” see Yackee (2014).
8
Greif and Kingston (2011). Since non-simultaneous exchange, like foreign investment, happens all the time, the task
becomes one of describing how the fundamental problem is overcome—making it fundamental in theory but not
necessarily in fact. This two-step intellectual program can be traced back at least to Hobbes, for whom the institutional
solution was a despotic sovereign.

4
worry is that the host state will opportunistically seize his investment and the income it generates
once the investment has been sunk. The logic is almost certainly already familiar to the reader,
either in the language of obsolescing bargain (Vernon 1971) or of credible commitment and the
time-inconsistency of host-state preferences (Guzman 1998).

Frieden tests his theory by informally examining the sectoral distribution of colonial investment,
focusing largely on the British case. Frieden’s sectoral predictions derive from the now-
commonplace observation that different kinds of foreign investment are theoretically more likely
to face problems of host-state expropriation than are others. Frieden presents expropriation
vulnerability as a function of the investment’s asset specificity. Asset specificity refers to the extent
to which the investor can redeploy the investment to another profitable use if the host state ends
the cooperative relationship. For example, an investment in a mine is arguably highly asset specific
from an investor’s perspective. Once the mine has been developed, the investor can’t readily
extract and profitably redeploy the investment should the host state expel the investor, seize the
mine, and operate it for the state’s sole profit. While at least one recent scholar of the political
economy of foreign investment has argued that sectoral theories based on asset specificity, such as
Frieden’s, fail to fully explain investment risk (Wellhausen (2016)), the basic idea is deeply
embedded in the larger literature and remains conventional wisdom. This is especially true as to
IPE research on investment treaties, nearly all of which, as Allee and Peinhardt (2014: 58) point
out, “portrays the treaties…as some type of credible commitment device.”

Frieden divides the colonial economy into four sectors—the primary sector (comprising export-
oriented natural resource extraction and agriculture), “affiliates of multinational manufacturing
corporations,” “public utilities” (including rail, water, power-generation, and urban
transportation), and “loans to governments.” He then informally characterizes each sector
according to its degree of asset specificity and he evaluates the potential of intra-sectoral
cooperative self-help 9 and of home state force 10 to resolve the expropriation risk. 11 Table 1 provides
a summary. 12

Table 1: Overview of Frieden’s theory

9
Frieden says that investors within a given sector may be able to effectively cooperate to “monitor and enforce” their
rights against the host state, by, for example, identifying and publicizing breaches and organizing retaliatory boycotts.
At other points he speaks of cooperation between home-state governments. In either case Frieden describes
cooperation as taking place along strictly sectoral lines. It is not at all clear, however, why cooperation could not
extend across sectors. The interests of the colonial powers in Africa were multifaceted and provided opportunities for
cooperation across sectors and issues.
10
By home-state force Frieden seems to mean on-the-ground military power deployed to physically protect an
investment while also allowing it to continue profitable operations. Frieden overlooks other ways in which home states
may seek to disincentivize expropriation—for example, through retaliatory violence or economic sanctions.
11
Frieden assumes that the domestic institutions of the host state (such as domestic courts) are too “costly” for the
investor to access and thus are ineffective at preventing or responding to host state opportunism. Frieden (1994: 565).
12
In what seems something of a debater’s trick, Frieden (1994: 561) touts his theory as clearer and more rigorous than
what came before, even though his own theory suffers from problems of vagueness and ambiguity. If the theory as I
have described it doesn’t make sense, the reader should refer to Frieden’s article for a fuller (though still problematic)
exposition.

5
 Investment sector Asset specificity/ Potential for Efficacy of home Expectation of
Vulnerability to self-help state force association with
expropriation cooperation colonialism
Primary High Low High Associated
(export-
oriented
agriculture,
mining)
Manufacturing Low Low Low Not associated
Utilities 13 Intermediate? Low Low Not associated
Public Loans 14 ? High Low Not associated

Frieden’s theoretical framework leads him to “expect colonial rule to be most commonly found in
association with foreign investment whose problems can be resolved” by colonialism. He argues
that investment in export-oriented agriculture and mining is easy to expropriate (highly asset
specific), that primary sector investors are unlikely to be able to effectively cooperate to protect
their investments, and that uniliteral home state intervention is effective at protecting such
investments. Thus, “primary investors will be more likely to support colonial annexation and …
colonial possessions are more likely to attract a disproportionate amount of primary investment.”
Frieden (1994: 574).

In contrast, he sees little incentive for host states to expropriate manufacturing investments, or for
home states to use force to defend such investments. This is because the manufacturing
investment’s value derives from its place in a larger “corporate network” that exists mostly outside
of the host state and which itself is not itself readily expropriated. Because manufacturing
investment doesn’t face significant expropriation risk, manufacturers are unlikely to lobby for
colonization or to invest more than they otherwise would have in the wake of it. Frieden’s analysis
of the public utilities sector (rail, electricity generation, and the like) is somewhat fuzzy, though he
seems to view such investments as often subject to expropriation risk but generally not amenable
to protection by force or through investor cooperation. He thus predicts little association between
colonialism and such investments; he expects instead to see a “pattern…of voluntary contracts and
negotiations between host countries and individual owners of utilities.” 15 And finally, as to public
loans, he suggests that private lenders will be able to cooperate to effectively sanction sovereign
default, making resort to home state force unnecessary for the protection of sovereign debt. Public
loans will thus not be associated with colonialism.

Canvassing the secondary literature on British colonial investment, Frieden claims to find
empirical support for his theory in the distribution of investment. As I show below, however,
Frieden’s theory is not supported by the French case. Indeed, his theory leads us astray in
important ways.
13
Frieden characterizes utilities as an “intermediate” case, but also says that “in many instances, utilities are asset-
specific and can be seized by force.” Frieden (1994: 571-572).
14
Frieden fails to discuss whether public loans are usefully analyzed under a concept of asset-specificity.
15
Frieden (1994: 572).

6
A Note on Colonial-Era Quantitative Data

The difficulties of applying a quantitative approach to the study of colonial investment flows are
both well-recognized and probably insurmountable. 16 French authorities failed to collect much in
the way of useful data on metropolitan investment in the colonies. Dresch (1946: 60) describes
that failure as the result of excessive “prudence” or “false shame.” The problem, though, is not just
one of missing numbers. The utility or validity of the numbers that can be found is doubtful, as
the literature of the era fails to adopt an explicit cross-nationally or diachronically consistent
definition of what should count, for measurement purposes, as an “investment.” Indeed, the post-
war concept of “foreign direct investment” was entirely absent, and the notion of “sectors” was
underdeveloped and unstable, making it difficult to map modern theories of investment and risk
onto whatever numbers one might find in the historical record. The utility of available data is
further constrained by questionable coding practices. Tabulators conflated debt with share capital.
They failed to distinguish public investment from private. They took no account of reinvested
profits. They couldn’t even say whether funds raised in European capital markets ever actually
flowed across colonial borders. 17

The paucity of reliable quantitative data means that tests of hypotheses about the amount and
distribution of theoretically relevant “investment” must be qualitative and, to some unavoidable
degree speculative and impressionistic. As I describe in more detail further below, it nonetheless
seems accurate to say that the overall sense of the literature is that French investments in the
colonial empire were surprisingly low, even in sectors that Frieden suggests should be most readily
stimulated by the property rights protections supposedly offered by colonial rule.

Investment and the Colonial Idea

By the early 19th century most of France’s first colonial empire had been lost, and it wasn’t until
France’s defeat in the Franco-Prussian War (1870) and the return to republicanism that France
began rebuilding her overseas holdings in earnest. We see the establishment of the Tunisian
protectorate (1881); the formation of the French Congo (1882) and its subsequent expansion into
the AEF, an administrative agglomeration including the modern-day Republic of Congo, Gabon,
Chad, and the Central African Republic; the transformation over the 1880s and 1890s of France’s
modest West African coastal presence into the sprawling Afrique occidentale française (AOF),
consisting of modern-day Senegal, Mali, Guinea, Côte d’Ivoire, Burkina Faso, Niger, and Benin;

16
On statistical problems specific to the French case, see Marseille (1984); Ngango (1973); Suret-Canale (1971).
17
Feis’s (1931) Europe, the World’s Banker is often cited for its quantitative claims about the volume of foreign
investment, but Feis never offers a clear definition or operationalization of his key concept of “investments abroad,”
and it is impossible to say what exactly he is estimating or how well he is estimating it. For whatever it’s worth, he
agrees that French investment in its colonies was but a small portion of overall French foreign investment. He
calculates a figure of nine percent in 1914. That figure seems to include public and private lending as well as
ownership shares in foreign ventures. The other major source of quantitative estimates is Frankel (1938). His estimates
too are of debatable quality, though they do support the conclusion that private investment in France’s sub-Saharan
colonies was very low relative, say, to private investment in South Africa.

7
the creation of French Indochina (1887); the conquest of Madagascar (1896); and the
establishment of the Moroccan protectorate under the Treaty of Fez (1912).

There is a large historical literature debating the causes of this expansive and diverse empire. As
might be expected, that literature suggests a complex admixture of political, military, and economic
considerations. By examining the literature, along with the discourse contemporaneous with
colonization, we can get a good sense of the extent to which investment-related credible-
commitment-type concerns may or may not have played much of a causal or justificatory role. The
inquiry is essentially ideational. Did those responsible for or observing colonization think and talk
about it in terms of protecting investment from opportunistic expropriation?

In fact, the history of French colonialism under the Third Republic is rich in articulated ideas of
aim and interest. Whether France should colonize, and how it should do so, were questions of
significant and sustained public debate. Colonialism was discussed in the Chamber of Deputies; it
was propagandized through a well-organized colonial “party” (lobby); and it was intellectualized by
colonial theorists. That corpus of material, and the secondary literature analyzing it, provides little
evidence that those responsible for colonization, or those who took economic advantage of it,
meaningfully thought about colonialism in investment-related credible-commitment terms.

A good Anglophone place to start is Persell’s (1983) careful study of the ideas, actions, and
influence of the French colonial lobby. Persell notes that while the causes of French imperialism
were “multifaceted” and shifting, expansion was initially driven largely by “strategic
considerations” and a desire to regain “national prestige” lost in the defeat to Prussia. Persell
(1983: 3). Great-power competition also played a role: pro-imperial propaganda amid the
“Scramble for Africa” was “pervade[d]” by a “sense of urgency, a feeling that France was about to
miss out on glorious opportunities,” that it was witnessing a “unique historical spectacle,” a
“veritable partition of an unexplored continent.” Persell (1983: 17). 18 Economic ideas and
justifications can certainly be found in the early propaganda, but they were largely based upon
wildly unrealistic and uninformed estimates of Africa’s economic potential for trade. This was in
part because exploratory missions were “dominated by military men, explorers, and publicists.
Notably lacking were economists” who might have been able to provide a more realistic assessment
of the meager opportunities for profit or the daunting challenges of colonial economic
development. Persell (1983: 17).

Persell also details the surprising (but well-documented) apathy of “l]arge French corporate and
banking organizations…toward colonies” and the “active hostility” of protectionist French
agricultural interests. Persell (1983: 2 & 4). French business interest in empire was mostly limited,
he says, to “small and medium-size entrepreneurs” who were “chronically short of capital” and who

18
A good example of the sense of urgency can be found in Leroy-Beaulieu’s article in the December 13, 1888, Journal
des Débats, one of France’s most influential newspapers. Leroy-Beaulieu describes a “continent…fought over by
everyone, with every bit, nearly without exception, divided up among the various European nations by procedures as
summary as the famous Papal Bull of Alexander VI that divided between Spain and Portugal all the land to seize
outside of Europe.” The obvious fear was that if France didn’t move quickly to seize territory, other European states,
to France’s lasting disadvantage, would seize it first. Thus, for example, Persell (1983: 21) explains French expeditions
in Dahomey in the early 1890s as aimed largely at “thwart[ing] the British.”

8
hoped that French government investment in colonial infrastructure might provide opportunities
for profit. Persell (1983: 4). Commercial houses and chambers of commerce in Bordeaux and
Marseille also supported colonialism, which would, they hoped, provide business to shippers and
port operators through the trade of colonial raw materials for finished French goods. Persell (1983:
33).

Why were the major French industrialists and financiers so apathetic to the colonial project? One
finds numerous references to excessive “timidity” in the historical literature, but Persell (1983:
112) offers a more convincing explanation: the highest levels of French finance and industry
recognized the outsized commercial risks of colonial investment, particularly in comparison to
opportunities in more civilized parts of the world—Russia, Turkey, Eastern Europe, and Latin
America. The latter enjoyed robust inflows of French capital over the period while the colonies,
with few exceptions, did not.

The lack of capitalist interest would prove theoretically and practically significant. The French state
was acutely aware of the potential costs of colonization to the metropolitan treasury, and a
consistent theme of commentary across the colonial period was that the colonies should pay for
themselves. Eugène Etienne, a prominent French politician and leader of the colonial lobby,
proposed a simple solution to the French government’s politically necessary insistence on
colonizing on the cheap. 19 In his model, colonization would be accomplished by privately financed
concessionaires, who would be granted extravagant quasi-sovereign rights over vast territories and
over virtually all economic activities. Such “colonization companies” would, he thought, develop
the colonies at their own expense and largely in place of the French state. But Etienne’s initial plan
was politically controversial and never fully implemented. 20

In response, the colonial lobby developed a new theory of colonization—the famous theory of mise
en valeur—in which the French state was to play a leading role. 21 Mise-en-valeur theorists
emphasized the essential need of both colonists and capital for the economic development of the
colonies, but it was the French state, and not the private sector, that was now supposed to supply
the bulk of the funds needed. Government subsidies and credit were needed to support
“railroad[s], mining and shipping firms, as well as other enterprises.” Persell (1983: 99). They were
needed to fund “public works, commercial concesssions, and [the] expansion of credit facilities.”
Persell (1983: 99). The government was, in short, the “only agency big enough to exploit its own
empire,” and colonial policy should thus orient itself “toward public works backed by government-
guaranteed loans.” Persell (1983: 99).

19
Etienne was a prominent French politician and an influential promoter of French colonialism. Etienne lays out his
concession plan in his Les Compagnies de Colonisation (1897). For an analysis of Etienne’s economic thought, see Lagana
(1978).
20
It was partially implemented, in secret, through the administrative awarding of two concessions in 1893. Once the
concessions became publicly known, opponents raised accusations of favoritism and corruption, and the concessions
were withdrawn.
21
Conklin (1997: 41) translates mise en valeur as “rational economic development” and contrasts it with economic
“plunder” and unmanaged exploitation that was “inefficient and potentially undermined the long-term economic
value of the colonies to the metropole.”

9
Alice Conklin (1997), the leading Anglophone scholar of mise en valeur theory, notes that the
focus on infrastructure was overlayed with a particular vision of how the colonies and the
metropole could together form a prosperous, coherent and complementary economic system. That
vision—which predated but continued well into the Third Republic—was one in which the colonies
would exchange raw materials for French-made manufactures under a privileged tariff regime.
Démier (2008). 22 The underlying economic model was based upon simplistic notions of Smithian
natural advantage and an expectation of efficiency gains from scale that would result from
specialization. 23 Free-traders, such as Leroy-Beaulieu, thought that complementary specialization
would emerge naturally absent government intervention. But the free-trade vision was never
realized, and the French government actively intervened across the colonial period to create and
maintain the desired trade patterns.

For example, Jules Ferry—twice prime minister and a champion of colonization—viewed

colonization and protectionism as working together to promote France’s industrialization by
providing metropolitan manufacturers with a market for their manufactured goods. The economic
point of the colonies was to alleviate the risk that “the whole industrial machine [of France] might
be stopped for lack of outlets” for production. Roberts (1963: 17). Colonial tariff policy from the
early 1880s on was accordingly aimed at “mak[ing] the colonies buy French goods,” and
metropolitan producers unsurprisingly resisted the establishment of competing industries in the
colonies while supporting protectionist tariff policies. (Id. at 45).

We find similar ideas in the work of Albert Sarraut, one of the leading French colonial theorists.
Sarraut had served as Governor-General of French Indochina and would, like Ferry had before
him, serve two terms as Prime Minister. Sarraut was a champion of a highly planned and
rationalized sort of colonization. His chef-d'oeuvre—La mise en valeur des colonies françaises—followed
on the heels of his presentation in 1921 of an ambitious draft legislative program to the Chamber
of Deputies and the hugely successful 1922 colonial exposition in Marseille. Over the course of
600-plus dense pages of analysis, plans, and statistics Sarraut made two key points. 24

First, the colonies should be encouraged to specialize in the production of those primary goods in
which they held a natural advantage, and they should export those primary goods to France in
exchange for French manufactured products. 25 Some colonies would focus on oilseeds; others on

22
And so, for example, the main economic justification for Napoléon III’s invasion of Cochinchina was that it would
encourage the native Annamites to exchange their “cotton, silk, rice, construction lumber, and sugar” for French
cloth, wine, and “Parisian goods.” Franchini (1951: 443).
23
I use the phrase “economic model” loosely. As Newbury and Kanya-Forstner (1969: 275) point out, economic
justifications for French colonization were “hardly the product of careful study” or of any sort of “serious assessment
of Africa’s economic potential.” Instead, they were based on casually articulated and accepted “myths” of tremendous
African wealth. The “age of imperialism was not the Age of Reason,” they say.
24
Sarraut’s thinking was not particularly original. We can find echoes of it in the works of other prominent colonial
theorists, such as Arthur Girault’s Colonisation et Législation, Jean de Lanessan’s Principes de colonization, or, as indicated
in the main text, in the ideas of French politician Jules Ferry. The lack of originality is important for my argument
because it suggests that Sarraut’s trade-centered understanding of the relationship between colonialism and capital was
widespread at the time.
25
Sarraut’s theory had an unfortunate whiff of the discredited pacte colonial, an historical arrangement under which a
colony was only allowed to trade with its own metropole. Sarraut attempted to distinguish his theory by allowing the

10
cotton; some on wood, or rubber, or silk, or coffee—“to each his task,” Sarraut (1923: 340-341)
proclaimed, as “predestined” by “nature, climate, by the constitution of the soil and subsoil, by
indigenous tradition,” with the whole assemblage rationally ordered to meet the supply and
currency-exchange needs of France.

Sarraut privileged the primary sector because of a particular understanding of where advantage
might lie and of how a division of economic labor would benefit a metropolitan France suffering
from supply shortages and unbalanced national accounts. The colonies should serve, he says, as
sources of cheap raw materials for French industry, undercutting “greedy” and “profiteering”
foreign sources of supply and ensuring France a measure of economic independence that would
shield it from future economic crises. Sarraut (1923: 75). The need was especially acute given the
steep decline in the franc’s value since the end of the war.

The political implications of this aspect of Sarraut’s model manifested themselves in fights over
tariff policy. High tariffs on imports from outside the empire encouraged the colonies to consume
globally uncompetitive French manufactured goods while encouraging French manufacturers to
purchase inputs from the colonies. It was widely recognized, going back to the debates over the
1892 Méline tariff, that French tariff policy could profoundly impact the scope and character of
colonial economic development. Indeed, one explicit purpose of the Méline legislation was to
discourage “the development of a manufacturing sector in the colonies.” Persell (1981: 81 n. 13).
Marseille (1984) suggests that had the French free-trade camp won the tariff battle we might have
seen more private investment in the colonial manufacturing sector, as French industry would have
faced greater competitive pressure to lower production costs by taking advantage of potentially
lower-cost labor in the colonies. 26

Second, Sarraut envisioned a robust infrastructural role for the French state. A good half of his
book is taken up with detailed colony-by-colony proposals for state-financed ports and roads, rail
and telegraph lines, dredged rivers and canals, lighthouses, post offices, irrigation systems, water-
treatment facilities, and more. The focus on state-provided infrastructure can be in part explained
as a story of domestic politics. For example, Conklin traces the colonial focus on rail in part to
lobbying pressure by French iron and steel interests which would supply the metal necessary for
construction. 27 On the other hand, there was clearly an ideational element. For Sarraut, such
projects, especially those related to the movement of goods to market, were precursors to private
investment, and they were necessarily the responsibility of the state—as attested to by a history
going back to the Romans and continuing through France’s post-1871 experience constructing a
world-class domestic rail network. The latter provided a powerful illustration the ability of rail to
integrate backwards people (there, rural French provincials) into a modern economy. Conklin
underscores the ideational element in suggesting that the focus on infrastructure was a product of

possibility of some colonial trade with foreign states as a way for France to obtain hard currency. That said, he clearly
envisioned a colonial trade relationship heavily weighted toward France.
26
Of course, colonial labor may have been less productive—and thus not necessarily “cheaper” than its metropolitan
counterpart.
27
The economic interests of French iron and steel producers are documented in many others sources as well, though
scholars debate the extent of the industry’s role as a causal factor in colonialism. See, e.g., McClane (1992); Moine
(2008).

11
the “strong Saint Simonian tradition” in France and to the Third Republic’s “infatuation with the
machine and its power to promote progress” through the “union of industry and technology and
feats of economic prowess.” Conklin (1997: 56-57). 28

From the perspective of Frieden’s theory, we can extract a handful of summary points. Frieden is
correct to suggest that the economic vision for the colonies was one centered upon what he calls
primary-sector production. The literature on French colonialism repeatedly portrays the colonies as
potentially copious sources of “produits du sol”—literally, “products of the soil”—understood as
including industrial crops like oil seeds, coton or rubber, but perhaps also food crops like rice;
tropical timber; or subsurface minerals. The focus on produits du sol was rooted in rudimentary
economic theory and a systemic vision of a complementary relationship of mutually beneficial
trade. Investment was the means of realizing the system, not the end.

Frieden is also correct in suggesting that colonial manufacturing was, at best, a small part of the
theoretical picture. In the metropolitan-colonial system, manufacturing was for the metropole. The
sectoral division of labor was arguably sensisble given differences in levels of economic
development and France’s place in the global economy, and it was not until the end of the colonial
period, as independence loomed, that colonial thinkers seriously considered the promotion of
colonial manufacturing to absorb the growing ranks of newly urbanized, unemployed, and
politically dangerous young men. But even then, and certainly earlier, the kinds of manufacturing
investments that might have been made would probably not have consisted of the sort that
Frienden anachronistically imagines—local branches of transnational corporations plugged into
complex supply chains and producing for the metropolitan market. 29 Instead, it would have
consisted of local plants, using local labor and local raw materials, to produce for the colonial
market. 30 The colonial administration had little incentive to promote this kind of import-
substituting investment, which would have cost the administration tariff and duty revenue
necessary to maintain the colony’s financial self-sufficiency, and, unsurprisingly, little such
investment materialized in practice. Kilby (1975: 491).

And while Frieden dismisses infrastructure investment as peripheral to the colonial project, in fact
it played an essential theoretical role. Rail was viewed as “the indispensable first step in a country’s
development in the modern world,” and it was “everyone’s conviction that no material or moral
progress [was] possible in [France’s] African colonies without railroads.” Conklin (1997: 53). The
idea is well-expressed by explorer Stanley’s oft-quoted quip that he wouldn’t give a penny for the
Congo without a railway and in Brazza’s insistence, as early as 1882, that a rail line through the
Niari valley, connecting the “grand routes of central Africa” with the coast, was “worth the
sacrifice” of millions upon millions of francs in probable construction costs. Sautter (1967: 220).
Once the infrastructure was built, economic development would surely follow; as Sarraut
optimistically put it, rail “creates its own traffic.” Sarraut (1923: 373).

28
On the role of infrastructure in Saint-Simonianism, see generally Emerit (1941).
29

30
And so, for example, one of the few important manufacturing investments in the AOF was the textile works in
Gonreville (Côte d’Ivoire), which supplied the local market using cheap local cotton. Kilby (1975: 471).

12
De Renty’s (1903) multi-volume study of colonial railways provides a nice illustration of the
conventional wisdom. In the developed countries of Western Europe the challenge was to retrofit
a modern rail network into an existing political and economic geography consisting of relatively
concentrated populations and established commercial and industrial operations. In the virgin
colonies “the problem was entirely different.” De Renty (1903: 1). There was no agriculture; there
was no industry; there was little commerce; there were few existing means of communication; and
populations were scattered across vast, unexplored, and sometimes hostile territory. Rail would
have to precede pretty much everything, including, in most cases, pacification itself. 31

This key difference had major implications for the planning, construction, and financing of
colonial rail projects. Absent government subsidies, railroads make financial sense only if the
investors can be assured a sufficient and regular volume of traffic willing and able to pay rates of
carriage above the cost the capital. 32 In the colonial context, traffic and cost estimates were highly
speculative. Export industries that might provide the necessary volumes had yet to be created, and
it was unclear whether such industries, once established, might be capable of providing, with
sufficient regularity, the necessary demand. 33 That the colonial countryside was immense and
thinly populated only magnified the financial dilemma, as it was unlikely that projects could rely
on passenger traffic to generate sufficient revenue. As to costs and operational challenges, early
efforts were hardly encouraging. De Renty offers the Dakar-Saint Louis line as a cautionary
example. The harsh climate drove expatriate workers back to the metropole; epidemic disease
killed off the native laborers; construction suffered from “grave defects.” 34

In the face of this substantial and multidimensional risk, it seemed obvious to colonial theorists,
like Sarraut, that the private sector was incapable of providing what was needed. The solution was
for the colonial state to step in. The colonial authority would take out or guarantee loans floated

31
Early investments in the gold sector in the Cote d’Ivoire provide an example of the temporal dilemma. In the wake
of the Transvaal gold rush foreign investors turned their attention to the Ivory Coast. (Renty, v. 2, p. 162). The
colonial government granted “numerous mining concessions,” mining companies sprung up “as if by magic.” Investor
enthusiasm was “premature,” however, given that the most promising regions were still “barely pacified,” and even
where they were, the lack of transportation meant that the “heavy equipment necessary for the gold mining industry”
(along with the scarcity of labor) could not be “put to work.” Id.
32
In fact, some major colonial rail projects had no real economic rationale. The trans-Saharan is a good example. There
was little hope that such a climactically hostile and sparsely populated region would ever support the level of commodity
production necessary to provide a financially adequate volume of freight traffic. The project’s utility, if it had any, was
political and strategic. It was political in that it would help pacify hostile desert nomads resistant to French rule. As de
Renty (1903(3): 459) puts it, “A railway is a synonym for power. It’s what, when necessary, can rapidly transport the
troops necessary to enforce respect for our authority. It’s a sort of Sword of Damocles aimed constantly at these people
who, if they profoundly venerate the saints of their religion, venerate just as much those who possess force.” And it was
strategic in the sense that it would allow the French to transport troops more efficiently between its various holdings,
useful in case conflict with England, France’s most worrisome African rival.
33
The rail project in Dahomey provides an example. Only the most profitable export crops—here, palm oil—could
plausibly generate sufficient traffic. But weather-related risks meant that palm-oil production might fluctuate year-to-
year, making it difficult to count on stable and predictable traffic flows. The solution, de Renty says, was for the
government to diversify the economy by promoting the development of other export crops, like cotton, itself a project
of uncertain success. De Renty (1903(3): 187).
34
De Renty (1903(2): 14, 23).

13
by major French banks. The loans in turn would be used for public infrastructure projects, such as
rail, that consumed large amounts of French iron and steel. The risk of failure, operational and
financial, fell primarily on the colonial authority, and ultimately on native colonial subjects who
financed the colonial enterprise via head taxes and import duties.

Credible Commitment in the Colonial Idea

Unsurprisingly, given the large corpus of pro-colonial arguments and ideas, it is possible to find
statements by observers contemporaneous with French colonization that might be read as
potentially expressing something like Frieden’s logic. What is surprising is how rare such
statements seem to be. One of the few French examples I located can be found in Paul Leroy-
Beaulieu’s masterwork, De la colonisation chez les peuples modernes. Leroy-Beaulieu was a brilliant and
prolific French economist. His De la colonization—which by the sixth edition spanned two volumes
and over 1,400 pages—stands as one of the most sophisticated and complex articulations of French
colonial theory. 35 Leroy-Beaulieu was also a prominent public intellectual, and his ideas about
colonialism were widely read and reflected his era’s pro-colonial thinking.

Leroy-Beaulieu certainly viewed colonization as justified in part by its potential to profit French
investors abroad, and one of his aims was to convince skeptics that the encouragement of capital
exports to the colonies wouldn’t harm the French economy by diverting capital necessary for
France’s own industrialization. His position, developed over the course of a chapter, was that the
growth of French manufacturing depended upon increased demand, which could be generated by
investing in colonies that would serve as outlets for increased production and as sources of raw
materials. In one paragraph of that larger discussion, Leroy-Beaulieu admits a possible objection by
an imagined “scrupulous reader” who argues that “the emigration of capital can happen without
colonization.” “That is true,” Leroy-Beaulieu says. But

[i]t is nonetheless preferable, all else equal, to export one’s capital to one’s own colonies
than to completely foreign countries. One is more assured of finding in the former good
administration, impartial justice, a favorable welcome and equitable treatment by the
public and government. Several countries are inclined to treat foreign capital badly when
they think they may henceforth do without foreign assistance. From this point of view,
capitalists run less risk in the colonies, which are a sort of extension of the metropole.

Leroy-Beaulieu (1908(2): 487). He offers as examples of such risk the recent Suez Canal episode, in
which the English imposed reductions in transit charges that harmed French shareholders; the
revaluation of the Egyptian debt, where half of the bondholders were French; and French
investments in Italian railways, which had been subjected to “ingenious and iniquitous
maneuvers” that had “ruined” or “depreciated” their investments. “If this [French] capital had
been placed instead in the French colonies, our capitalists would have conserved all this revenue
and capital.” Leroy-Beaulieu (1908(2): 487 n.1).

35
The 1911 Encyclopedia Britannica described Leroy-Beaulieu as “the leading representative in France of orthodox
political economy, and the most pronounced opponent of protectionist and collectivist doctrines.” For an insightful
overview of his colonial thinking, see the relevant chapter in d’Andurain (2017).

14
This brief discussion is the most explicit in the book of what seems a rough concept of political
risk, though Leroy-Beaulieu’s understanding of it also seems much broader than Frieden’s of
opportunistic expropriation. Leroy-Beaulieu does not develop the argument and quickly moves on
to other issues, but the implication is that colonization was intended to avoid political risk rather
than to resolve it. Leroy-Beaulieu doesn’t want France to colonize Italy in response to Italy’s
mistreatment of French railway companies; rather, he wants France to place its investments
elsewhere—in places where political risk was never very high, precisely because indigenous polities
were poorly organized and unable to resist the imposition of French rule. 36

Another example that I stumbled across during research involves German colonization rather than
French. A memo from the Hamburg Chamber of Commerce to German Chancellor Bismarck in
1883, advocating for a German colony in Central Africa, emphasizes the region’s “dense
population of potential consumers” which would provide a “particularly interesting outlet for
[German] industrial products.” (The memo is quoted in Harding (2017)). A colony would
circumvent monopolies on trade with the interior held by “independent negro tribes” and by
coastal colonies of other European powers. The Chamber also mentioned the “undeniable
fertility” of the region’s soil and the alleged abundance of manual labor, which together meant that
the region was especially favorable to the development of plantation agriculture. But, the Chamber
continued, “it has been said that industrial plantations would be in regions where the planter
would have to confront, without rights or power, the greed and arbitrariness of uncivilized
chiefs…in consequence, plantations can only be created in those places where the presence of a
civilized nation provides the necessary protection.” And the Chamber recommended avoiding
German colonization of places like Dahomey or Ashanti, which were ruled by “powerful kings.”
Instead, Germany should focus on areas ruled by “numerous small chiefs,” so that any “eventual
disputes…wouldn’t cause any grave consequences.” That recommendation transforms what
initially looks like support for Frieden’s thesis into something rather different. It suggests that
German colonization should proceed by avoiding the risk of “arbitrary” conduct of powerful native
states by colonizing places where such risk was already low because of a lack of effective native
political authority. The logic seems quite like Leroy-Beaulieu’s, and it leads us naturally to an
exploration of indigenous capacity to expropriate.

The Capacity to Expropriate

While it is difficult to generalize across such a large geographic expanse, it seems generally true that
the focus of colonization was on territories that lacked cohesive, effective modern government.
The lack of organization was accompanied by a lack of native bureaucratic and technical capacity
to seize and profitably operate investments whose success depended upon access to and command
of Western technology, administrative systems, and trading networks. This was true even as to
investments in sectors that Frieden considers to be most at risk of native expropriation, due to
supposedly high asset specificity. Take mining, for example. Perhaps the most successful French

36
We see that same logic in action in Leopold’s Congo. Belgium was a pint-sized power, and Leopold, to realize his
ambitious commercial vision, needed to find in Africa a political void, a place where other European states weren’t
already active and where native political institutions were “crumbling” and unable to resist. Acherson (1999: 53).

15
mining investment of the colonial period was the Rothchilds’ nickel mine, “Le Nickel,” in New
Caledonia, an isolated island 750 miles east of Australia. (For discussions, from which the
narrative here is drawn, see Dousset-Leenhardt (1969); Newbury (1955)). At the time of
colonization, the native Kanaks lived an economically primitive and politically fractured existence,
separated into warring clans. The French, rather than using the opportunity of their conquest to
strengthen property rights, instead expropriated native land and redistributed it to European
settlers while forcing the indigenous population onto reservations constructed on the island’s least
productive land.

Le Nickel’s New Caledonian operations included both mining pure and simple (extracting ore)
and the construction and operation of a primary smelting facility, with the smelted ore then
shipped to France and Belgium for additional processing. The investment’s profits depended upon
continued access to European capital markets, to European smelting technology, to a network of
European refiners and marketers, to trained managers and technicians, and to cheap prison labor
supplied by the French penal system to work the mines. Bencivengo (2014). It seems clear that the
native Kanaks never had any capacity to seize and successfully exploit such a complex and globally
integrated affair.

The same point applies to other kinds of colonial investment in other colonial territories. Taking
over and operating investment for profit—whether in agriculture, or in transportation, or even in
as crude an industry as wild-rubber extraction—was beyond the capabilities of the typical native
polity. Successful export-oriented plantations required the mastery of modern agronomic science,
on transportation and tariff access to European markets, on administrative systems capable of
rounding up and efficiently managing native workers. Effective railroads required skilled engineers
and a continual supply of replacement parts and fuel, along with capital subsidies or a reliable and
robust source of paying export-oriented cargo to transport to (Western) markets. Profitably
extracting wild rubber likewise required reliable access to Western markets as well as a colonial
state able to coerce scattered native populations, at a grand scale, into laboring for it.

The risk of opportunistic expropriation appears to have been quite low even in the case of
relatively organized African states. Take Tunisia. The territory enjoyed perhaps the most coherent
and modern domestic institutions in Africa at the time of colonization. In the mid-1800s French
advisers had helped Ahmed Bey, Tunisia’s great reformer, create a modern military and navy, and
Tunisia was the first of the Arab countries to promulgate a written constitution, in 1861.
Unfortunately, in the 1860s Tunisia’s leader Muhammad al-Sadiq borrowed large sums from
European financial markets, and his subjects revolted when he tried to raise taxes to pay what was
due. 37 He quickly defaulted and consented to an international financial commission controlled by
French, Italian, and English representatives.

The bey’s deep dependence upon continued access to European capital markets meant that he had
little incentive to expropriate foreign investment. He was embedded within long-term relationships
with the European powers that would have made expropriation politically and perhaps even
personally suicidal. France’s invasion in 1881 (and the establishment of the protectorate—a sort of

37
On the Tunisian debt crisis, see Tunçer (2021).

16
colonization lite) was not sparked by al-Sadiq’s failure to pay what he owed. Major French creditors
to Tunisia had little interest in pushing for annexation, as annexation (and the military conflict
that it would entail) would threaten to disrupt the relatively successful operation of the
International Financial Commission that was charged with restructuring Tunisia’s debt and
administering an orderly system of repayment. Annexation was instead a response to al Sadiq’s
increasing domestic political weakness and his inability to prevent restive tribes from attacking
French traders. 38 While it is sometimes suggested that the French invasion was in part a response
to the bey’s mistreatment of French investments on the ground, careful historical research of the
two main affairs shows that the claims of investor mistreatment were pretextual and that the
incidences did not involve opportunistic expropriation or its threat. 39

In sum, the risk of expropriation in what would become the colonies appears to have been low,
across all sectors of investment. However, I don’t mean to suggest that the French didn’t face
serious security challenges. Sub-Saharan Africa’s vast and wild expanses (and the desert hinterlands
of the Maghreb) meant that Europeans isolated in the interior could face significant personal risk
well into the colonial period. Indigenous populations had ready access to firearms up until at least
1890, and they enjoyed advantages of mobility and familiarity with the local terrain that
metropolitan troops lacked. Natives could raid jungle warehouses and they could ambush trading
expeditions. They could harass and sometimes massacre colonial armies. They periodically revolted
against European subjugation, as the Kanaks did, unsuccessfully, in 1878. The historical literature
on French colonialism speaks consistently of the challenges of “pacification.” But the point of
native attacks on French interests was to cause the invaders pain and to protest abuse and the
disruption of pre-existing social structures, not to take over the running of their enterprises. 40
Wondji (1993).

The Case of the French Congo

The history of the French Congo provides a useful illustration of some of the themes addressed
above. I focus on three here: the lack of a native capacity to expropriate; the French focus on trade
rather than investment; and the failure of French colonization to promote investment.

The Incapacity to Expropriate

38
The history of the Moroccan protectorate is similar, in that the proctectorate arose in response to the Moroccan
government’s political weakness, not strength. By 1904, it was clear that Morocco was “collapsing into financial chaos
and civil anarchy” Cooke (1973: 17); it was unable to collect taxes from its local populations; and it couldn’t guarantee
the safety of its roads or the loyalty of its troops. The Sultan’s lack of authority emboldened rebel tribes and bandits to
attack French convoys and to assault French colonial settlements in Algeria, disrupting French trading interests. The
situation worsened, and in 1907 civil war broke out; the Sultan finally abdicated in late 1909, leading to the
establishment of the French protectorate.
39
For discussions, see Ganiage (1955); Emerit (1945).
40
See, for example, Coquery-Vidrovitch (1998), which describes the causes of native uprisals in the Upper Sangha
region of the Congo. She elsewhere notes that the French attempt to impose a head tax in the Congo “provoked
energetic local reactions” that includic “periodic…attacks and pillaging of isolated factories” during which agents were
“injured, killed, even eaten by exasperated villagers.” Coquery-Vidrovitch (1972: 197).

17
The French Congo emerged from Brazza’s heroic competition with Stanley in the 1880s. Brazza
and Stanley (and those Europeans who immediately followed) experienced native government as
fractured and disorganized, quasi-feudal if not anarchic. 41 French adventure novelist and scientific
populizer Paul Blaise offers a colorful (if racially insensitive and culturaly ignorant) account that
provides a useful window into how the Congo was imagined by potential French investors. His
account is also representative of first-person accounts and subsequent scientific studies. 42 Blaise
describes Congolese society as village-based, with the indigenous population living in something
close to a state of nature, ahistorical and out of time, “primitive and almost animal-like.” Blaise
(1887: 18). Native government, especially south and east of the remnants of early Portuguese
empire, was a “pale copy of feudalism.” Blaise (1887: 171). It consisted of a “multitude” of weak
and arbitrary kings, imperfectly ruling over subsidiary chiefs and tributaries. Blaise (1887: 171-
172). Intertribal conflict was frequent; domestic slavery was common; and the extent of
cannibalism was, among European observers, much debated. Even in better-organized areas
agglomerations were small and economic activity was rudimentary by European standards.
Agriculture was largely subsistence-level, supplemented by jungle foraging. Husbandry was micro-
scale. Industry consisted of cottage handicrafts, such as carved ivory, or crude weapons forged in
simple clay furnaces. Trade was important, but basic: salt for slaves; ivory for old European
firearms, gunpowder and cloth. Infrastructure, apart from some impressive bridges made of vines,
was non-existent.

Blaise notes that the Congo was an attractive target of colonization precisely because of its political
disorganization. To make the point, Blaise asks his reader to suppose an apparently “impossible”
hypothetical: “that there exists a black [man] intelligent and strong enough to reunite under his
scepter fifty million men,” and to ask “what would be the first act that such a sovereign would
take? Assuredly, he would ban Europeans from his empire, and he would have the means to keep
them at a distance; as he would never tolerate armed whites established in his domain.” In that
case, of a unified and well-governed native “empire,” Europeans would have to come as
“supplicants,” their presence subject to the good graces of an “African despot.” But in the actual
Congo whites “came as masters; we imposed ourselves” on defenseless villages unable to resist
submission to European rule. Blaise (1887:220). Blaise’s logic resembles that of Leroy-Beaulieu and

41
Europeans experienced native government in West Africa in a similar way—as “chopped up…into an infinity of
tribes, without any ties between them, speaking at least sixty different dialects, fighting one against the other.”
Angoulvant (1916: 8). As in the AEF, the lack of political cohesion in the AOF made French conquest relatively easy.
As Angoulvant observes, the French could knock off each tribe one by one, without the risk that a rival tribe would
come to its aid.
42
See, for example, Coquery-Vidrovitch (2014), which describes the Congo as a land of “fetischists” and “cannibals”
living in “full anarchy” (210), and the Middle Congo (in comparison to parts of Chad) as completely lacking “any
social organization, any meaningful consolidation of tribes.” (221). Vansina’s (1973) classic athrophological study of
the Middle Congo confirms the historical anarchy and disorganization. German sources portrayed German Cameroon
in similar terms, emphasizing its dangerous and oppressive “virgin forests” and swamps, the unhealthy climate, the
lazy, lying, and greedy natives, child-like, “unstable” and “incoherent.” Dippold (1973). The Belgian Congo was
politically fractured and disorganized as well, due in part to the disruptions caused by Zanzibarite slavers, who regularly
raided the interior, captured natives, and frog-marched them to Africa’s east coast for shipment to the Arabian
Peninsula.

18
the Hamburg Chamber of Commerce, discussed above, where colonization is an imposition on the
weak rather than a solution to the threat of expropriation by the strong.

Trade, not Investment

Second, early French interest in the Congo, and conflict with the natives, clearly reflected a trade
rather than investment focus. As Coquery-Vidrovitch (1972: 31) notes, Brazza’s vision of the
Congo was fundamentally economic rather than political, based upon the idea of creating
transportation routes and trading networks linking the mouth of the Congo River to upper Egypt.
Brazzaville, in the area transferred to France through the famous treaty with King Makoko, was the
“keystone” of the plan. 43 While Brazza insisted from early on that the colony needed a rail line to
the coast, the point of such an investment—which would take decades to construct, costing, in the
process, thousands of native lives—was to drain African commodities from the interior and
transport French finished goods inland. 44

The underlying trade-focused economic theory was ubiquitous, even if some observers suggested
that the territory’s trade potential was exaggerated. The French recognized that the power of
certain tribes, particularly around Stanley Pool, arose from their monopolies on trade between the
interior and the coast. The French presence might be welcomed by tribes which thought that they
would benefit from France’s disruption of traditional trading patterns; or it might be opposed by
those who would lose their place of priviliege as those patterns were disrupted. (Guiral 1889: 87).
Conflict, when it arose, had nothing to do with threats of expropriation, but with trade-related
economic disturbances, and French abuses. This was true even in parts of the colony that enjoyed
relatively coherent local indigenous institutions.

For example, in the Haut-Oubangui (in the modern day Central African Republic) the French
found “something which didn’t exist anywhere else in the French Congo: a perfectly established
and respected authority, social and political organization, commercial habits.” Dampierre (1967:
456). The sense of perfection was exaggerated, though understandably so in contrast to the
apparent anarchy of the Middle Congo. Despite the “perfection,” inter-tribe wars (conducted on
an annual basis), raids, slavery, and kidnappings (especially of women) were common. Muslim
states in the Sahelian north, such as Dar-Four, enslaved idolatrous southern blacks on a “grand
scale,” sending captives by caravan to Egypt and the Near East. Dampierre (1967: 421-425). The
heads of what the French called “sultanates” nonetheless maintained some semblance of order and
control, profiting from monopolies on trade with the Arabs and Europeans. The Sultanate of
Rafai had an especially effective governing structure, with the sultan delegating power to regional

43
Brazza intended the treaty with Makoko to break the Stanely Pool monopoly by creating a French-controlled trading
network centered around Brazzaville as the “market hub of Central Africa”. Coquery-Vidrovitich (1965: 58).
Brunschwig (1965: 11-12) suggests that Makoko may have seen the treaty as an advantageous opportunity to regain
control over trade that had been lost in recent years to “barbarian warriors.”
44
Brazza, in fact, obtained a 99-year rail concession from the colony in 1890, but the project was quickly killed off by
powerful Belgian financial interests involved in Leopold’s rail project on the Belgian side, who feared that a second
line would undermine their anticipated monopoly profits. The French eventually constructed a line, the Congo-
Ocean, which opened to traffic in 1934. Sautter (1967).

19
governors possessing their own security forces and whom the sultan taxed by requiring the
provision of various services, such as paddling and portage.

The French initially cooperated with the sultans, treating them as allies and protégés. In the Haut-
Oubangi, the French took advantage of the existing system of slavery and of the sultans’ political
power by, in effect, employing the sultans, through a system of commissions, to coerce local
populations into supplying ivory and rubber. 45 As French power in the region increased, the
French government implemented a radical change in policy, transforming what was essentially a
tributary regime (with the French paying the tribute) to one in which the sultans themselves were
expected to contribute to the costs of French administration. At the same time, French private
interests began directly dealing with native suppliers, cutting the sultans out of the transactions.
The result was the creation of a private French trading monopoly, organized as the Compagnie des
Sultanats du Haut-Oubangi (SHO) that, while investing little in the region, generated significant
profit from the extraction and export of ivory and wild rubber.

Another nice example is provided from the Belgian side of the Congo, where Leopold had to
contend with the the relatively powerful and well-organized Sultanate of Zanzibar. The Arab
Zanzibarites regularly raided the interior for ivory and slaves. Slaves were used for portage and
traded into servitude in the Middle East. The Arabs’ main concern from the increasing Belgian
presence was the loss of their monopoly over the ivory trade. The weakness of Leopold’s proto-
state meant that he initially had to ally with Tipo Tip, a powerful Zanzibarite slaver and trader.
Tipo Tip served as a middleman, acquiring ivory from native sources and selling it to Leopold and
his companies. Leopold used Tipo Tip’s slaves to carry the ivory to port and resold it on the
Anvers market. This cooperative relationship lasted until the 1880s, when Leopold had gained
sufficient control over his vast territory to push the Arabs out and to capture the profits of
monopoly for himself. The Arab defeat in the Arab-Congo war freed up native labor for Leopold’s
own slave-like exploitation, and it allowed him to divert Congolese trade flows from east to the
west, with Stanley Pool, firmly in his hands, as the chokepoint.

Both examples show how colonization, at least in its early stages, was primarily about gaining
control of trade, not about the facilitation of asset-specific investments. Moreover, those cases
suggest that colonization was not a substitute for bargains with indigenous leaders, but essentially
depended upon the making of such bargains. Those bargains could be relatively explicit, embodied
in treaty; they could also be implicit. But the core idea was that the colonizers would share with
native elites some of the spoils of colonization in exchange for the elites’ willingness to serve as
intermediaries between the colonizers and the colonized population. Historian Ronald Robinson
(1972) argues that this strategy of bargain-centered “collaboration” was widespread. When bargains
broke down, it was not because of “opportunistic expropriation” on the native side, but by the
colonizer’s recognition that its power had become sufficient to force through a renegotiation of
terms in its favor.

Property Rights, but a Paucity of Investment

45
As discussed in Coquery-Vidrovitch (1972: 107-111).

20
Third, the French Congo illustrates how ineffective French colonization was at promoting
productive private investment. The failure to invest is all the more striking given the French
government’s focus, from the early days of colonization, on providing would-be investors with a
generous property-rights regime. Recall that Etienne’s original vision of French colonization in the
Congo would have relied upon “colonial companies” as vast, well-capitalized private monopolies
vested with regalian rights and responsibilities. Etienne’s plan was controversial from the
beginning, and the decree of March 28, 1899, implemented a less radical version of it. 46 Instead of
granting companies carte blanche, the 1899 regime imposed a sort of standard-form contract in
the form of a cahier des charges. Privately financed concessionnaires would apply for monopoly
rights of exploitation, covering vast swathes of largery unexplored territory, but those rights were
time-limited (30 years) and burdened with certain obligations. The French government hoped that
with minimal public expense it could encourage private companies to take on the task of mise en
valeur while also rapidly generating revenue that would be shared with the government.

Forty concessions were formed, backed by private capital of about 60 million francs, an amount
that Catherine Coquery-Vidrovitch (1968: 98), the leading French scholar of the concession
regime, calls “derisory” given the scope of the task at hand. 47 The contracts gave the companies the
exclusive right to exploit the agricultural, forest, and industrial resources of their territories.
However, the Berlin Act separately imposed a regime of “free commerce” on much of the Congo.
Craven (2015). The concessionnaires were able to avoid the liberal implications of the Act through
the legal fiction that most of the conceded land was, in legal jargon, “vacante et sans maître.” Under
metropolitan French law, derived from the Roman, such “vacant and ownerless” land was the
property of the state, which could then alienate it to private parties for exploitation. By doing so
the French government made the natural resources found on the conceded land the severable
property of the concession-holder. And the concession-holder, as owner of that severable property,
naturally had the legal right to prevent third parties from selling what was not theirs. The practical
effect of this legal reasoning was to exclude third parties, whether foreign or French, from
independently trading for ivory and rubber with the natives (or setting up businesses exploiting
natural resources on conceded land) without the permission of the concessionnaires.

The application of the vacant-land theory illustrates an irony of a property rights theory of
colonialism: the colonial enterprise rested upon massive disruptions to native property-rights
schemes; indeed, it rested on expropriation. 48 French observers of the era routinely described
Africans as having no conception of private property, or even, south of the Maghreb, a workable
notion of collective property. Surret-Canale (1971: 253) views those descriptions as both false and
self-serving, as providing legal cover for an exercise of power “untrammeled by any legal restraint.”
As he puts it, the reliance on the concept of vacant lands to justify colonization “did not arise, as is

46
For the texts of the concession decree and the cahier des charges, see Renard (1901).
47
Coquery-Vidrovitch calculates that amount as equivalent to 360 million 1967 francs; converting to 1967 dollars and
inflating to 2021 dollars suggests an approximate modern value of $591 million.
48
The irony is evident but unresolved in de Tocqueville’s (2001) writings on the colonization of Algeria. He
recognized the need to expropriate land from natives, making it available to French settlers, while also forcefully
condemning the colonial administration’s application of its expropriatory powers against French settlers themselves.

21
sometimes alleged, from a lack of knowledge” of African property-rights traditions. Id. The French
understood that most colonial land was in fact owned communally, even if it was left periodically
vacant.

The main commercial challenge for the concessionnaires and the colonial administration was to
incentivize the natives to collect and deliver company-owned commodites for the lowest possible
price. This challenge, of “indigenous labor,” was perennial and severe. Leopold solved it in his
Congo by creating a brutal and repressive system of forced labor, based upon the imposition of
mandatory taxes payable in rubber. French public opinion demanded a softer and arguably more
humane approach, though method adopted was a capitation tax roughly comparable to Leopold’s.
It was hoped the tax would drag resistant natives into the concessionary economy. The tax proved
a failure. It didn’t raise significant revenue for the colonial administration, and it didn’t build up a
reliable supply of voluntary labor for the companies. Indeed, it seemed to incentivize
Leopoldesque abuses that further turned French public opinion against the colonial enterprise. As
Brazza evocatively put it in his official report on human rights abuses in the concession territories,
“It is not surprising that the [native] resents having to work two days in the deep forest, far from
his village, having nothing to eat except what he has carried in, devoured by insects and other pests
that swarm the forest, soaked head to feet in foul-smelling and sticky rubber sap.” Coquery-
Vidrovitch (2014: 185).

The concession regime almost immediately revealed itself as misconceived, and, in not much more
time, a disaster. Coquery-Vidrovitch (1972). 49 The concessionnaires were under-financed; the
territories vast; managers inexperienced and often incompetent. They were also grossly under-
informed. Critical decisions were made only upon “conjecture;” economic plans were “stuffed full
of guesswork;” valid “climatological, soil, or agronomic studies” were completely lacking; the
country was largely unexplored, unsurveyed, “almost entirely unknown.” Coquery-Vidrovitch
(1972: 71-72 & 76). Estimates of population and of economic potential were wildly inaccurate;
concession borders were uncertain. Coquery-Vidrovitch (1968: 99) refers to a “tragic lack of
information.” Renard (1901: 7), writing at the beginning of the concession regime, suggests that
investor interest in concession companies was “spontaneous and unreflective,” a sort of mania
ignited by a growing sense that Leopold was reaping easy riches from his own colony and that
France could and should do the same. But the harsh climate, the dense vegetation, tropical
disease, the utter lack of infrastructure and building materials, a scattered and primitive native
labor force, all combined to present “insurmountable difficulties” for the meager capital deployed.
Coquery-Vidrovitch (1968: 98).

Some of the concession companies quickly folded as it became clear that their territories were
fundamentally unexploitable. For example, one concession, unbeknownst at the time of
application, apparently consisted entirely of swampland. Other concessionnaires held on for a
time, but, with rare exceptions, they ran persistent deficits and rarely paid dividends. By the end of
the concessionary period virtually all the 40 companies had gone bankrupt. Exploitation had never
advanced much beyond the economie de traite—the gathering, and predictable decimation, of wild

49
On the immediate challenges facing the companies, see also Jeaugeon (1961: 392).

22
stocks of rubber, ivory, and exotic wood. 50 Capital investments had been minimal; rubber vines
hadn’t been replanted; mining and industrial activity was negligible; and infrastructure remained
primitive and rare.

What explains the lack of investment? Coquery-Vidrovitch blames the concession regime itself,
poorly conceived from the beginning and which locked in a set of pervese institutional
arrangements. She traces the problems at least in part to Brazza, whose actions and ideas had
tremendous influence in the early days of French colonization despite the “gaps and errors in his
economic conceptions, despite his ignorance of the mechanisms and laws of the nascent colonial
capitalism, and…his limited contacts within the world of business and banking.” Coquery-
Vidrovitch (1972: 47). Brazza’s commitment to a concession theory of colonization was reflective
of his unsophisticated and naïvely conservative political-economic philosophy under which
“economic liberalism would drive the Congo to ruin.” Coquerty-Vidrovitch (1972: 45). For Brazza,
a regime of free competition would lead to “price anarchy” and “ruinous competition.” Id. He
failed to recognize the dangers of an alternative regime of “uncontrolled monopolies” that would
“abusively suppress” the native population and lead by a different path to an “equivalent paralysis
of economic life.” Id.

Coquery-Vidrovitch’s criticism of Brazza’s early thought is interesting considering Brazza’s

subsequent recognition and diagnosis of the concession disaster. In 1905 Brazza was charged with
investigating allegations of human rights abuses in the concession territories. Brazza’s report
described the regime as “badly prepared, badly conceived, badly or not at all administered
[controlé], [as] fail[ing] to reflect any of the government’s predictions as to development or even
profitability.” Coquery-Vidrovitch (2014: 115). Brazza’s analysis suggests two key design flaws in the
French concession regime, and the larger literature suggests a third.

First, by granting time-limited monopolies on “products of the land” to underfinanced companies

the regime incentivized a business model based on making money sooner rather than later and
with little commitment of capital. Vesting an exclusive right of exploitation to a single company
discouraged more-entrepreneurial third parties from setting up shop, as third parties had no rights
to directly purchase or produce commodities. The result was a one-dimensional focus on quickly
extracting the most readily available natural resources using the limited tools at hand—primarily,
unskilled native labor susceptible to state-tolerated coercion. As the rubber ran out so too did the
terms of the concessions. By the end the companies still standing preferred to go out of business
rather than to invest in territories that would, in just a few years, no longer remain under their
exclusive control. 51

50
Coquery-Vidrovitch (1972: 417) describes the economie de traite: “in the productive regions and at places most easily
accessible by water, the commerçant, installed in his factorie, simultaneously an office, a storehouse, and a wholesale and
retail outlet, gathered up products from the wild and from local plantations, unprocessed or crudely refined using
techniques that were most often archaic” and purchased in exchange for western goods purchased from the trader’s
boutique—cloth, clothes, salt, and hardware.
51
Thus, as Coquery-Vidrovitch (1972: 263) argues, a “definitive alienation” to the companies would have been better
than a time-limited concession, as they would have then been better assured of capturing the long-term benefits of
investments in new vines and trees.

23
Second, the concession agreements failed to impose realistic and enforceable investment
obligations on the companies. True, Article 6 of the cahier des charges required the concessionnaires
to plant rubber vines in proportion to their harvest from wild stocks; Article 7 required a rather
vague “progressive exploitation of conceded lands”; and under Article 8 concessionnaires were
promised full ownership over territory that they had economically developed. But the prospect of
future ownership proved a weak incentive to invest in the here and now, and as noted, durable
investments were limited. In some cases, “investment” was for show rather than substance,
intended to fool government compliance inspectors. Coquery-Vidrovitch (1972: 429) quotes a
government report from 1911: “Each year, the announcement of the next administrative
inspection would serve as the sole motivation for the hasty planting of thousands of young plants
destined to make an appearance on [the company’s] inventory and then to disappear from lack of
care some days later.” 52

French authorities were apparently aware, early on, that the concessionaires were abusing the
natives (in violation of the terms of their concessions) while also doing little to develop the areas
under their control. In theory the authorities had a potent corrective tool—the threat of forfeiture
under the terms of the concession contracts. But investigations of breach were inevitably scuttled,
and the administration failed to annul any of the concessions for “non-exploitation, incapacity, or
criminal process.” Coquery-Vidrovitch (1972: 276). Forfeiture actions were viewed as extremely
“delicate” and unlikely to solve the underlying problem, as the cahier des charges specified that a
forfeited concession should be re-allocated to a new applicant under the same flawed terms.
Coquery-Vidrovitch (1972: 277).

Third, the French government was apparently stuck by its own law of government contracts. It
couldn’t reform the concession regime without risking lawsuits in France by disappointed
concessionnaires. Coquery-Vidrovitch (2014: 194). 53 Coquery-Vidrovitch (1972: 313-315) describes
the companies, especially the “least dynamic” of them, as exceptionally skilled at extracting
indemnities from the French state for “more or less imaginary harms.” Changes would have to be
negotiated (as they were in 1910-1911), but those reforms, by granting the concessionnaires new
advantages as an inducement to accept change, only served to “suspend [the concessionnaires’]
bankruptcy or to spur a liquidation in their favor.” Coquery-Vidrovitch (1972: 266). Law, designed
to tie the government’s hands to promote private investment, counterintuitively prevented
investment by locking in an unfortunate and unproductive allocation of rights. 54 And so, by the
end of the Congolese concession regime, little of any lasting economic value had been created.

A Brief Extension to French West Africa

The narrative above suggests that the investment problem in the French Congo wasn’t too few
rights, but rights of the wrong sort, given to the wrong people, rights made too enforceable rather

52
The incentives problem was obvious early on. See, e.g., Challaye (1906: 56-57).
53
As Challaye (1906: 55) put it, “without a doubt the concessionaires would demand a formidable indemnity to give
up their monopolies. Given the state of our legislation, it would perhaps be impossible for the State to avoid that
colossal and absurd expense.”
54
See especially Roberts (1963: 356-359). Coquery-Vidrovitch’s research also well-supports the point.

24
than not enforceable enough. One potential challenge to that explanation is that the level of
private investment in French West Africa was almost equally disappointing even though French
merchants and settlers in the AOF had successfully resisted the imposition of a concession scheme
to West Africa. The AOF, unlike the AEF, “had a growing French population and many vigorous
and competitive firms” who “feared that establishment of monopolies would damage their trading
network.” (Persell 1983: 109). And yet, long-term private investment in the AOF remained
minimal. McClane (1992). For example, McLane’s tabulation of mining concessions in French
colonial West Africa identifies “3,542 separate concessions, owned by 458 different
concessionaires,” a “scramble” that McLane attributes to “exaggerated imaginations…of Africa,
from the Cape to Senegal, as one vast gold-bearing reef.” McClane (1977: 45). And yet barely any
of the mining concessions invested or exploited anything. Those that went on to form actual
mining companies were few and far between, and they were hopelessly undercapitalized. McLane
finds evidence that only nine companies imported any mining equipment at all into the colony.
What was imported quickly broke down or proved inadequate to the task at hand. Native methods
of mining, primitive though they were, were probably as effective at extracting the colony’s “low
yield, widely dispersed deposits,” and only a single mining company survived into the post War
years.

We might explain the similarity of outcome on shared material challenges. For example,
investment opportunities of sufficient profitability and acceptable risk were apparently few and far
between in the AOF, as in the AEF, because of the lack of readily exploitable colonial inputs.
Skilled labor was completely wanting, and in many parts of the empire even unskilled labor was
both scarce and resistant to the miserable work and low pay on offer. Profitably extractable
concentrations of exportable minerals, as McClane noted, were few and far between. And the lack
of coal, or the means to efficiently transport it from where it might be found to where it might be
needed, meant that industrial investments like steel or textile mills, which depended on cheap
energy, were never a realistic possibility. Moine (2008).

Perhaps surprisingly, material barriers to agricultural investment were also severe. A proper
plantation enterprise would need to “bear the heavy burden of equipment and brush-cutting, to
invest important capital which remains unproductive for years, and finally to recruit the labor
force essential to their work from a scattered population.” Suret-Canale (1971: 185). The load was
not one that the thinly capitalized trading companies that dominated the colonial economies were
willing to bear, and even late into the colonial period colonial agricultural production “techniques
remained, with few exceptions, those of pre-colonial times: tillage [by peasants] with the hoe on
patches of burnt land, and extensive cultivation, involving long periods of letting the land lie
fallow. The use of draught animals in ploughing and of mechanical power, even in elementary
forms…was generally unknown.” Suret-Canale (1971: 218). Even on settler plantations most of the
agricultural work was “manual,” performed with crude tools by “requisitioned labour” or by
migrant workers on short-term contract. Suret-Canale (1971: 219).

But the problems don’t seem purely material. While the AOF was not subject to a Congo-style
concession regime, the French government’s model of economic development for the colony
consisted of government incentives for natives to grow export-oriented crops “along the lines of a

25
sturdy yeomanry” rather than on support for plantation agriculture and the substantial capital
investments it would have required. Roberts (1963: 328). Investments were made, but they were
public investments in the development of a coercive administrative apparatus that, through the
imposition of taxes, encouraged native populations to work as suppliers for West Africa’s great
trading companies. 55

Concluding Thoughts

According to Angoulvant (1916: 22), the colonial governor of the Côte d’Ivoire and a theoretician
and practitioner of colonial pacification, Africans viewed the French as “intruders, reckoning that
they were less wretched before our arrival.” The natives accepted the French presence only as long
as the French made no demands upon them. But, as Angoulvant points out, the very purpose of
colonization was to make demands through the process of “administration.” “The meaning of the
word administer is, after all, imposing rules, limiting individual liberties to ensure the freedom of
all, gathering taxes, in subservience to the aims that are to be attained in the higher interests of
civilization.” Angoulvant (1916: 22). Administration, in Angoulvant’s sense, is a brutal imposition
on the individual and on the integrity of native society. A focus on colonization as about the
protection of rights obscures the brutality, and the irony. If colonialism was about the protection
of investor rights, it also seems to have been about the massive violation of native rights in the
process.

We can avoid the irony by recognizing that Frieden’s theory of colonialism, in which colonialism
was a rational-institutional solution to the credible commitment problem, enjoys little support in
the historical record. The incongruencies are numerous. Frieden says that native polities had the
capacity to expropriate French investments in the primary sector, but the native capacity to
expropriate seems to have been minimal. He says that colonization should have promoted
significant investments in mining; but mining investment in French-controlled Africa was, with an
exception or two in the Maghreb, negligible. He expects colonization to promote investments in
export-oriented agriculture, but the agricultural economy of the French Congo consisted almost
entirely of low-capital exploitation of wild stocks of ivory and rubber. And in French West Africa
the agricultural economy was based on the governmental coercion of small-scale native planters,
not on capital-intensive plantations. Frieden says that colonialism will not be associated with
investment in “utilities,” but public investments in infrastructure lay at the core of the French
colonial idea. Frieden is correct that colonization prompted little investment in manufacturing,
but he is wrong to suggest that metropolitan manufacturers had little interest in colonization.
French iron and steel manufacturers stood to profit handsomely from government-sponsored
infrastructure projects, and they seem to have provided at least some political support for colonial
expansion. And while no cases of French colonization seem to have been spurred by the threat or
fact of a sovereign debt default, Frieden’s insistence that colonization was not associated with
public finance unfairly diverts attention from the important role that borrowing and guarantees by
the colonial administration played in financing colonial operations and activities.

55
As Bobrie (1976: 476) points out, a large portion of French public investment in the colonies was aimed at
“transforming local precapitalist economies through the monetarization of exchange and the introduction of paid
labor.”

26
A messier but more accurate story highlights the ways in which relevant actors perceived colonial
economic opportunities. Those perceptions reflected material realities, to some degree, but they
also reflected shared ideas of what the metropolitan-colonial economic relationship should be.
And they were shaped by the French government’s institutional choices, which incentivized some
private activities while discouraging others. Ideas and choices were sticky: even after World War II,
as the empire was falling apart, the French government maintained relatively fast to the notion
that it could promote colonial economic development, and maintain metropolitan control,
through heavy-handed market interventions focused largely on public investment in colonial
infrastructure. 56

To conclude, let me return to this article’s epigraph. Credible commitment, to paraphrase,

Conrad, is an idea that the modern IPE literature on foreign investment sets up and bows down
before. But what if credible commitment is more of a problem in theory than in fact? This article
has suggested that credible commitment was not an observably salient part of colonialism or
colonial investment. Is it particularly salient to investment in the post-colonial era? As government
and private archives from the 1960s and 1970s become increasingly accessible to researchers, IPE
scholars interested in post-colonial foreign investment should take inspiration from Frieden’s
precocious but flawed engagement with history. The occasionally spectacular expropriations of
those years inspired the idea of the obsolecing bargain, and they undergird the now-conventional
wisdom that host state opportunism is an endemic investment risk absent intrusive institutional
solutions, like investment treaties. Historical research is especially well-suited to uncovering the
ideas that key actors held about aims, opportunities and constraints, and it can validate or
challenge those deeply embedded intuitions about the prevalence, character, and behavioral
impact of investment risk. For example, my own recent archival research on major expropriation
events in post-colonial Mauritania and the Republic of the Congo suggests that domestic politics
and the breakdown of investor-host state relations, not opportunism, prompted the seizures, and
that despite the absence of formal international legal protections the investors and the home state
enjoyed various other sources of leverage to pressure a reasonable settlement of claims. Yackee
(2021; 2019). More such work remains to be done, and Frieden’s article, by taking the past
seriously, helpfully points the way forward.

56
Post-war colonial policy is discussed in Rabearimanana (2004); Marseille (1982); Ngango (1973). While the French
continued to focus on public infrastructure, they also increased their focus on supporting the development of the
colonial manufacturing sector through state subsidies of various schemes and designs. Manufacturing (or
“industrialization”) was viewed as a means of providing employment opportunities for an increasingly urbanized
colonial population. De Jonchay (1953).

27
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