There Are Two Broadly Opposed Sets of Explanations for Changes in British Colonial Currency Policies

There are two broadly opposed sets of explanations for changes in British colonial currency policies. The first and the largest body of literature of which Fieldhouse (1981) is a leading exponent, suggests a natural ‘stages’ sequence of progressive monetary development akin to W.W Rostow’s model of stages of economic development beginning with a primitive society and ending with a mature developed modern economy. Firmly rooted within neoclassical economic theory, this literature explains the colonial monetary history as one of modernization of primitive and inferior currency systems, with every successive currency being better able to satisfy the basic functions of money, leading to greater monetary integration of colonies with the metropolitan economy and world trade.

A second set of explanations sees colonial currency policies as manifestations of imperialist control of colonial economies, safeguarding the interests of the colonizing power rather than that of the colony. De Cecco (1974) and Nabudere (1981) are two good exponents of this view. Within this approach may also be situated much of the academic criticisms of the currency board system and the negative impacts on colonial welfare, that emerged during World War II and in the decade after.

--Wadan Narsey, British Imperialism and the Making of Colonial Currency Systems, Palgrave Studies in the History of Finance (Houndmills, UK: Palgrave Macmillan, 2016), 6-7.