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The Historical Context In Which The Economies Of Madagascar And New Zealand Developed

2461 words - 10 pages

Intro – The Malagasy are the very strong willed, native residents of Madagascar. The Maori are the fierce native tribes of New Zealand. In the 1800’s both of these lands were overrun with tribal violence and nearly constant warfare. Neither society had progressed technologically past the wooden or rock weapons. Economies of scale were non-existent in either place. Now, over 200 years later, New Zealand is a very civilized country with an export-driven economy. While Madagascar, despite its economic potential, has a GDP per capita lower than $500 (world bank). Why is there such a huge disparity between the countries? The answer can be found by examining the how their separate political institutions have evolved. By contrasting how the two countries development since they were colonized we can begin to understand why New Zealand’s stability has fostered an environment for international investment and economic growth. While Madagascar’s inability to maintain stability in their government has led to very unstable economic conditions. The political institutions for both countries were defined by the countries that settled and colonized them. This paper will seek to help the reader understand the historical context in which both economies developed. With this background in place, it will be clear to see that political stability breeds an environment of trust among the people of a country, which allows for businesses to have low transaction costs and less corruption costs as well.
Madagascar became a trading post for both Britain and France in the early days of colonization, but it wasn’t until 1895 that the French established a colony officially in Madagascar. This was formally recognized by Britain and the trade relations that had begun with Britain were halted. The reason that France was supposedly colonizing during that time period was to uplift, enlighten and pacify the native people. However, France enslaved the Malagasy people. They forced them into corvee, which is unpaid labor imposed by the government. They imposed their language onto the people, and didn’t allow any governmental representation for the Malagasy initially. They were basically exploiting the natural resources and labor resources of Madagascar. As a result of corvee, there were multiple violent revolutions by the exploited Malagasy before the end of the World Wars. Each was suppressed by the French. As time passed on, the system of corvee was abolished and the economy of Madagascar was integrated with that of France. In 1960 France gave Madagascar its independence. http://education.stateuniversity.com/pages/903/Madagascar-CONSTITUTIONAL-LEGAL-FOUNDATIONS.html. Its first sovereign government was an autocratic ruler whose party controlled the parliament. It was a very centralized government with very close ties to the French economic system. This new government began to establish trade relations with South Africa. However, the economy was deteriorating and by 1972 the people of...

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