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The dynamics of inequality in a newly settled, pre-industrial society: the case of the Cape Colony

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  • Johan Fourie

    () (University of Stellenbosch, Stellenbosch, South Africa)

  • Dieter von Fintel

    (University of Stellenbosch, Stellenbosch, South Africa)

Abstract

One 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 own 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) settled on the land and established a unique set of institutions, within which inequality evolved. This paper provides a long-run quantitative analysis of trends in asset-based inequality (using principal 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.

Suggested Citation

  • 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.
  • Handle: RePEc:afc:cliome:v:4:y:2010:i:3:p:229-267
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    Cited by:

    1. Sophia du Plessis & Ada Jansen & Dieter von Fintel, 2014. "Slave prices and productivity at the Cape of Good Hope from 1700 to 1725: did all settler farmers profit from the trade?," Working Papers 17/2014, Stellenbosch University, Department of Economics, revised 2014.
    2. Rulof Burger & Rachel Jafta & Dieter von Fintel, 2016. "Affirmative action policies and the evolution of post-apartheid South Africa's racial wage gap," WIDER Working Paper Series 066, World Institute for Development Economic Research (UNU-WIDER).
    3. Johan Fourie & Jan Luiten Zanden, 2013. "GDP in the Dutch Cape Colony: The National Accounts of a Slave-Based Society," South African Journal of Economics, Economic Society of South Africa, vol. 81(4), pages 467-490, December.
    4. Jerven, Morten & Austin, Gareth & Green, Erik & Uche, Chibuike & Frankema, Ewout & Fourie, Johan & Inikori, Joseph & Moradi, Alexander & Hillbom, Ellen, 2012. "Moving Forward in African Economic History. Bridging the Gap Between Methods and Sources," Lund Papers in Economic History 124, Lund University, Department of Economic History.
    5. Auke Rijpma & Jeanne Cilliers & Johan Fourie, 2018. "Record linkage in the Cape of Good Hope Panel," Working Papers 06/2018, Stellenbosch University, Department of Economics.
    6. Patrizio Piraino & Sean Muller & Jeanne Cilliers & Johan Fourie, 2013. "The transmission of longevity across generations: The case of the settler Cape Colony," Working Papers 14/2013, Stellenbosch University, Department of Economics.
    7. Johan Fourie, 2011. "Slaves as capital investment in the Dutch Cape Colony, 1652-1795," Working Papers 21/2011, Stellenbosch University, Department of Economics.

    More about this item

    Keywords

    Settler societies; Wealth distribution; Inequality; Asset index; Institutions; Mercantilism; Dutch East India Company; South Africa;

    JEL classification:

    • 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

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