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From Land Grants to Loan Farms: Property Rights and the Extent of Settlement in Dutch South Africa, 1652-1750

Author

Listed:
  • Alan Dye

    (Barnard College, Columbia University)

  • Sumner La Croix

    (University of Hawai‘i-MÄ noa)

Abstract

This paper examines a paradox in the formation of property rights in land in the early settlement of the Dutch Cape Colony. In 1652, the Dutch East India Company (VOC) established an outpost at the Cape of Good Hope to serve VOC ships sailing between Europe and Asia. Over the next 75 years, the outpost expanded into a full-fledged VOC colony. As a thin but growing population expanded land claims to graze sheep and cattle. The VOC initially promoted settlement by extending well-specified and enforced land grants in restricted zones. But by 1714 it transitioned to accommodate rapidly expanding settlement with a more loosely specified form of property rights, the loan farm. We develop a profit-maximizing monopsony model to explain the VOC choice to transition from land grant to loan farm. We conclude that the decline in the population size and ability of the Khoikhoi, a first people who inhabited the Cape, to resist Dutch incursion was critical to the transition, as it lowered the government costs of enforcement and enabled the rapid expansion of the pastoral economy.

Suggested Citation

  • Alan Dye & Sumner La Croix, 2017. "From Land Grants to Loan Farms: Property Rights and the Extent of Settlement in Dutch South Africa, 1652-1750," Working Papers 201706, University of Hawaii at Manoa, Department of Economics.
    • Handle: RePEc:hai:wpaper:201706
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    File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_17-06.pdf
    File Function: First version, 2017
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    Cited by:

    1. J. Fourie, 2018. "Cliometrics in South Africa," Studies in Economics and Econometrics, Taylor & Francis Journals, vol. 42(2), pages 1-14, August.

    More about this item

    Keywords

    Cape Colony; sheep; cattle; property rights; loan farm; frontier; land tenure; VOC;
    All these keywords.

    JEL classification:

    • N47 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Africa; Oceania
    • N57 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Africa; Oceania
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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