, Volume 4, Issue 3, pp 229–267 | Cite as

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

  • Johan FourieEmail author
  • Dieter von Fintel
Original Paper


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.


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

JEL Classification

N37 D31 D63 



The authors would like to thank Jan Luiten van Zanden, Stephan Klasen, Sam Bowles, Servaas van der Berg, Walter Zucchini and two anonymous referees for their valuable comments. Participants at the following seminars and conferences also provided helpful feedback: FRESH meetings (Strasbourg), Groningen University, Göttingen University, Stellenbosch University and the ERSA Economic History Workshop (Durban). Financial supports from the Department of History and Culture at Utrecht University, the Deutsche Akademischer Austauschdienst, the Faculty of Economic and Management Sciences and the International Office at Stellenbosch University are gratefully acknowledged. The authors would also like to thank Harri Kemp and Hendrik van Broekhuizen for valuable research assistance, and Hans Heese for his generosity in sharing the raw data.


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Copyright information

© Springer-Verlag 2009

Authors and Affiliations

  1. 1.University of StellenboschStellenboschSouth Africa

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