A Study: Colonial Legacy on Banking, Finance and Taxation

Abstract

This paper examines the long-lasting effects of colonial rule on banking, finance, and taxation systems in colonized territories. By exploring the institutional designs, fiscal objectives, and financial infrastructures introduced or reshaped during colonial administrations, it argues that the colonial legacy created structural patterns that have continued to shape post-colonial economic development. The analysis highlights three interlinked dimensions: the creation of extractive fiscal systems, the formation and orientation of banking institutions, and the imposition of legal-financial frameworks that privileged metropolitan capital flows. Case evidence is drawn largely from British colonial India and comparative observations from other European colonies to illustrate mechanisms through which colonial policies became persistent features of modern financial systems. The paper concludes by reflecting on policy implications for contemporary reforms aimed at reorienting financial systems toward inclusive development.