Long Live the Nigerian-Fijian Empire! Persistent Effects of Horizontal Institutional Transfer in the Late British Empire

We examine the origins of institutional differences between colonies, emphasizing the impact of horizontal intercolonial ties on subsequent legal-institutional development. British colonies exchanged and transferred personnel between them right up to their independence in the 20th century. Exploiting new biographical data on over 14,000 British and local colonial officials in 44 colonies, we trace the transfer patterns of colonial officials between colonies to proxy the horizontal diffusion of legal-institutional knowledge within the British Empire. Pairs of colonies with a higher number of personnel who served in both colonies develop more similar institutions after independence, which reduces GDP differences between them. The effects emerge only after decades of independence, suggesting a persistent channel of shared tacit knowledge, ideas, and norms. Analysis of the sequence of placements shows that the effects of placements are driven by officer transfers, not colony characteristics. To fully understand institutional divergence attention to horizontal colonial ties matters.