Her Majesty's Aid: Imperial Subsidies and State Building in the British Empire

• In Event: State and Fiscal Capacity: Integrating Historical and Contemporary Approaches

Abstract

In the interwar period London launched a development assistance program to prepare the colonies for self-government within the Commonwealth. This program was a compromise between two souls within the official class: those who saw colonies as a captive market for British exports—the Tories and trade unions within Labour\textemdash and those interested in improving the living standards of the native peoples in the Commonwealth— the Fabians within Labour. The first step of the plan was to make the colonies financially self-sufficient. To that end, the 1929 Colonial Development Act and the 1940 Development and Welfare Act set up a high-powered incentive system for colonial administrators to mobilize colonial resources via taxation. Drawing on recently declassified records and newly collected data on imperial assistance for 56 colonies and addressing threats to causal inference, this paper shows that Colonial Development and Welfare aid grew fiscal capacity in the colonies. This paper sheds light on the gradually transformation of imperial policy toward the colonies after World War I, the drivers of colonial state building leading to independence, and the colonial origins of foreign aid.

Author

• Didac Queralt, Yale University