The pattern of stagnating growth and underdevelopment remains an all too common phenomenon for countries with a colonial past, regardless of efforts by developmental economists and international organizations. In order to increase our understanding of what factors lead to this pattern, this study investigates the link between colonization and growth by examining trade characteristics of prior colonies. Using data from the World Bank, the IMF and the OECD, this study utilizes simultaneous equation modeling to determine how trade patterns can provide the link between colonization and the current state of underdevelopment in Africa, the Middle East, and Latin America. This leads to a more refined understanding of why economic development fails to occur even in a period of booming international trade and globalization. Probing into the trade patterns of these nations, this paper answers the following question: Does colonial identity impact trade and growth patterns today? This study finds that history plays a role in determining how countries trade and grow, but the results are varied depending on the analysis utilized. Furthermore, there is a link between the types of goods traded and the growth of a nation, but trade in primary products does not necessarily limit a country’s growth potential.
Includes bibliographical references.