Niall Ferguson's book "The British Empire" discusses the varying levels of investment safety in different types of colonies. It suggests that a formal colony, like India, was considered a more secure investment compared to a de facto colony, such as Argentina. The term "de facto colony" refers to territories where control is exercised without formal colonial status, leading to increased uncertainties. Ferguson implies that the established systems and governance in places like India lent an air of stability and security for British investors.

The distinction between iure colonies and de facto colonies underscores the complexities of colonial investment and governance. Investors felt more confident pouring resources into areas where legal and institutional frameworks were established, as in the case of India's formal colonial administration. Conversely, regions lacking such structures presented risks that could deter investment, resulting in a less favorable economic environment for expatriates and investors in places like Argentina.