Moving Forward in Rural Ghana: Investing in Social and Human Capital Mitigates Historical Constraints

There is now considerable evidence to suggest that historical events have had long-term impacts on economic outcomes in Africa. What is less widely studied is the potential for mitigating such impacts. We surveyed 400 pineapple farmers in Ghana and find that both the historical dependency on different crops and the impact of the trans-Atlantic slave trade predict income differences in 2013. However, not all farmers are affected equally by history. Using instrumental variables to identify causal effects, we find that human and social capital are pivotal for overcoming historically inherited constraints.