Suriname: An example of the ‘Reverse Fortune Hypothesis’?

This paper deals with the ‘Reverse Fortune Hypothesis’ – of the authors Acemoglu, Johnson and Robinson – to see if it corresponds with Suriname when it was colonized by the Europeans. Even though in 1500 there were hardly any inhabitants living in Suriname, it did have enough fertile soil to grow plantation products on it, which had a large demand in Western Europe. Suriname got exploited by the colonists when “extractive institutions” where set up. There did not get any “institutions of private property” developed, because every agricultural colonization of the European farmers had failed. This has to do with Suriname having a disease environment, which means the acceptance of the ‘institutions hypothesis’. The situation of having “extractive institutions” maintained long after the independence of Suriname in 1975. Around 2005 the Surinamese president Venetiaan decided to further change their institutions – a process that he started the first time he got elected as president of Suriname in 1991 – and make Suriname attractive to foreign investments, thereby creating a healthier economy than they have now. The conclusion is that Suriname does not meet the requirements of the ‘Reverse Fortune Hypothesis’, because Suriname was during the colonization relatively poor and remained relatively poor after the colonization.