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  • French Neo-Colonialism? Franco-African Trade

    After Independence

    Emmanuelle Lavalle Julie Lochard

    Very preliminary and incomplete. Please do not quote.

    July 2016

    Author Keywords: Trade; Decolonization; French Empire, Sub-Saharan Africa.

    JEL classification codes: F10; F54.

    PSL, Universit Paris-Dauphine, LEDa, UMR DIAL. Email: emmanuelle.lavallee@dauphine.fr.Erudite, University of Paris-Est Crteil Val de Marne. Email: julie.lochard@u-pec.fr.

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  • 1 Introduction

    Over the long run, politics had obviously shaped the pattern of international trade (Findlay and

    ORourke, 2007). Over the recent past, evidence are fragmented and sometimes contradictory,

    especially as far as power plays in the international order is concerned.1 For instance, Berger et al.

    (2013) show that increased political influence, due to CIA intervention during the Cold War, was

    used to create a larger foreign market for American products. Following CIA intervention, imports

    from the US increased dramatically while total exports to the US were unaffected. Mityakov,

    Tang and Tsui (2013), on the other hand, show that deterioration of relations between the United

    States and another country reduced U.S. imports from that country, but that the magnitude of the

    effect is small and limited to petroleum and some chemical products. Beyond the United States,

    the influence of other powers, like the USSR, Great Britain or France may have determined the

    pattern and the evolution of foreign exchanges. France offers an interesting case in this regard. It

    maintained strong connections with its former colonies in Sub-Saharan Africa (SSA). Indeed, in this

    region, independence did not radically change relations between France and its former colonies.

    Contrary to what happened in former colonies located in other parts of the world, France and

    its former colonies in SSA kept on having strong economic and political links at least until the

    beginning of the 1990s. Do this special Franco-African Relation (hereafter FAR) promote French

    exports?

    The French influence operated both at the political and economic level. It included not only

    secret cooperation agreements, but also personal and friendly ties between French and African top-

    level officials or development assistance. Beyond anecdotal evidence, singular FAR are likely to

    have influenced trade. They may explain why, more than 50 years after their independence, former

    French SSA colonies still trade more with their former colonizer than other African former colonies

    (de Sousa and Lochard, 2012). To the best of our knowledge, the impacts of FAR on French-African

    trade have never been explored at least in a comprehensive empirical manner. Little explored in

    economics, a large literature deals with this issue in political sciences. Yet, Franco-African relations

    are an area where objective and scientific knowledge is still relatively scarce. The aim of this paper is

    twofold. First, it intends to test whether FAR distorted French exports towards SSA former French

    colonies and to isolate the products that were the most affected. Second, it aims at explaining the

    drivers of this potential Franco-African trade gap.

    To examine the consequences on trade of FAR, we use data for bilateral aggregated and sectoral

    exports of France with 188 partner countries over the period 1960-20072. Aggregate trade data are

    taken from the International Monetary Funds Direction of Trade Statistics (DOTS) and sectoral

    1As opposed to intra-state or inter-state wars which impact on trade as been studied by Martinet al., 2008 for instance)

    21962 for sectoral data

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  • trade data, at the four-digit level, come from commodity trade statistics database of the United

    Nations Statistics Division (UN Comtrade). In addition to disentangle the drivers of this FAR effect

    on trade, we gathered a bunch of data on development assistance, migration, military interventions,

    or on political proximity as well as original data on inter-personal ties between French and African

    officials. The later is approximated by bilateral visits of top-level officials between France and

    foreign countries collected from the French Ministry of Foreign Affairs.

    We find that FAR distorted French exports in favor of its former SSA colonies. Indeed, our

    results indicate that France exported significantly more to its former SSA colonies, as compared

    to other countries, whether they be in development or other former French colonies. This extra-

    trade between France and its former SSA colonies closely reflects the twists and turns of the

    FAR. For example, the gap started to narrow when FAR began to fall apart at end of the 1980s.

    Furthermore, this FAR effect is robust to the introduction of additional explanatory variables or the

    use of other methods of estimation. Analysis at the sectoral level show that FAR impacted a large

    variety of products going from manufactured goods to machinery and transport equipments through

    food. Using Rauchs classification (1999), we find that FAR affected indifferently reference-priced,

    homogenous and differentiated goods. A finer analysis reveals a larger effect of FAR for French

    exports of luxury goods and for goods in which France was least competitive. As regards, the

    drivers of this FAR effect on trade we provide evidence that the political factors and, in particular

    political proximity measured by similarity in United Nations General Assembly voting patterns,

    explain most of the observed extra-trade between France and its former SSA colonies.

    The paper is structured as follows. In section 2, we discuss the French influence in SSA.

    Then, in section 3, we introduce the empirical model and describe our data. In section 4, we

    present empirical evidence on the effect of the FAR on aggregate and sectoral trade. Finally, in

    section 5, we investigate several potential economic and political drivers of the French influence.

    We summarize our findings and add concluding remarks in section 6.

    2 The French influence in SSA

    The French influence in African former colonies after independence is the consequence of how

    decolonization took place in SSA. Decolonisation in SSA was included in the scope of a of pr-

    carr, i.e. the reinforcement of frontiers in order to better resist to external aggressions. In other

    words, in the Cold War context, France wanted to keep its influence on its former SSA colonies

    because they were an essential element of its international influence. Orchestrated by the the

    emblematic Jacques Foccart3, decolonization in SSA aimed at setting up a network of African

    3Jacques Foccart led the Franco-African policy together with the French Presidents De Gaulle,Pompidou and Chirac. He is also associated with the dark side of the Franafrique. Since 1960,

    3

  • Republics allied with France (Bat, 2012). In 1960, almost all former French colonies become

    independent mostly peacefully.4

    Negotiations on the terms of independence led to the signature of secret cooperation agreements

    of two kinds. The first one dealt with the privileged access of France to its former colonies raw

    materials. The second one, claimed by African Presidents themselves, concerned the military

    protection of new regimes. The contract between France and its former French colonies was the

    following: France supported the African Presidents friends of France, i.e. Presidents defending

    French positions in the international arena or granting a French preference in any sector (Bat,

    2012). The Franco-African policy was organised in Paris in the Office of the Executive Power

    through the Secrtariat Gnral des Affaires Africaines et Malgaches led by Jacques Foccart. Its

    mission was to inform the French President of the political evolutions of the African Republics,

    of their reciprocal relations, as well as their relations with France. The Secrtariat Gnral des

    Affaires Africaines et Malgaches organized the relations between French and African executive

    powers. It not only dealt with diplomatic relations between friendly States, but it was also in

    charge of the personal and friendly ties between French and African top-level officials, especially

    Presidents.5 Thus, interpersonal ties were the keystone of FARs and of the French African policy.

    The strength of personal bonds was at the very foundation of FARs.

    FARs had also economic demonstrations. After attaining independence, most of the new

    African states decided to keep a common exchange rate mechanism. The Franc Zone, which

    dates back to the colonial period, provides an unlimited convertibility guarantee from the French

    Treasury and a fixed exchange rate between the CFA franc, the Comorian Franc and the French

    Franc (now the euro). Independence went hand to hand with development assistance. One of its

    mechanisms, tied aid, was deemed to have long guaranteed a virtual monopoly for French firms

    conducting infrastructure projects in Africa (Gounin, 2009; Dozon, 2003). Concomitantly, there

    had never been so many Africans in France and French people in Africa as after independence.

    France posted a large number of public servants to newly SSA independent states. Where there

    were fewer than 7,000 colonial administrators in 1956, there were 8,749 people on Voluntary Service

    in the newly independent states in 1963, 9,364 in 1973 and 10,292 in 1980 (Gounin, 2009, p. 23).

    This phenomenon was not confin