The dynamics of inequality in a newly settled, pre-industrial society: The case of the Cape Colony
AbstractOne reason for the relatively poor development performance of many countries around the world today may be the high levels of inequality during and after colonisation. Evidence from colonies in the Americas suggests that skewed initial factor endowments could create small elites that owned a disproportionate share of wealth, human capital and political power. The Cape Colony, founded in 1652 at the southern tip of Africa, presents a case where a mercantilist company (the Dutch East India Company) settles the land and establishes a unique set of institutions within which inequality and development evolve. This paper provides a long-run quantitative analysis of trends in asset-based inequality (using Principle Components' Analysis on tax inventories) during the seventeenth and eighteenth century, allowing, for the first time, a dynamic rather than static analysis of inequality trends in a newly settled and pre-industrial society over this period. While theory testing in other societies has been severely limited because of a scarcity of quantitative evidence, this study presents a history with evidence, enabling an evaluation of the Engerman-Sokoloff and other hypotheses.
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Bibliographic InfoPaper provided by Stellenbosch University, Department of Economics in its series Working Papers with number 17/2009.
Date of creation: 2009
Date of revision:
South Africa; settler societies; Kuznets; income distribution; asset index; institutions; mercantilism; Dutch East India Company;
Other versions of this item:
- Johan Fourie & Dieter von Fintel, 2010. "The dynamics of inequality in a newly settled, pre-industrial society: the case of the Cape Colony," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 4(3), pages 229-267, October.
- Johan Fourie & Dieter von Fintel, 2009. "The dynamics of inequality in a newly settled, preindustrial society: The case of the Cape Colony," Working Papers 134, Economic Research Southern Africa.
- N37 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Africa; Oceania
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-08-02 (All new papers)
- NEP-HIS-2009-08-02 (Business, Economic & Financial History)
- NEP-POL-2009-08-02 (Positive Political Economics)
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