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Institutions for the taking: property rights and the settlement of the Cape Colony, 1652–1750

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  • Alan Dye
  • Sumner La Croix

Abstract

We examine the formation of property rights in land during the early settlement by the Dutch of the Cape Colony at the southern tip of Africa. After its founding in 1652 as a provisioning outpost for ships of the Dutch East India Company (VOC), the colonial government promoted settlement initially by granting land with well‐specified and enforced property rights in restricted zones near Cape Town. By 1714 it transitioned to accommodate rapidly expanding settlement by creating a weaker form of property rights, the loan farm, which was imprecisely defined and had limited government enforcement. We develop a profit‐maximizing monopsony model to explain the VOC's choice to transition from the better‐specified land grant to the less well‐specified loan farm. We conclude that the decline in the population size and ability of the Khoikhoi, the Cape's original inhabitants, to organize effective resistance to the Dutch invasion was critical to the transition, as it lowered the costs of private enforcement of settlers’ territorial claims. The choice of property rights thus enabled and encouraged the rapid taking by European settlers of the western Cape of Africa for the expansion of the Dutch colony's pastoral economy.

Suggested Citation

  • Alan Dye & Sumner La Croix, 2020. "Institutions for the taking: property rights and the settlement of the Cape Colony, 1652–1750," Economic History Review, Economic History Society, vol. 73(1), pages 33-58, February.
  • Handle: RePEc:bla:ehsrev:v:73:y:2020:i:1:p:33-58
    DOI: 10.1111/ehr.12817
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    Cited by:

    1. Rui Wang & Qianmao Zhu & Matthew Noellert, 2024. "Weak central government, strong legal rights: the origins of divergent legal institutions in 18th-century Chinese and Japanese rice markets," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-15, December.
    2. Ann M Carlos & Erik Green & Calumet Links & Angela Redish, 2024. "Early-Modern Globalization and the Extent of Indigenous Agency: Trade, Commodities, and Ecology," Working Papers 01/2024, Stellenbosch University, Department of Economics.
    3. Jeanne Cilliers & Erik Green & Robert Ross, 2023. "Did it pay to be a pioneer? Wealth accumulation in a newly settled frontier society," Economic History Review, Economic History Society, vol. 76(1), pages 257-282, February.
    4. Cilliers, Jeanne & Green, Erik & Ross, Robert, 2022. "Did it pay to be a pioneer? Wealth accumulation in a newly settled frontier society," Lund Papers in Economic History 237, Lund University, Department of Economic History.
    5. Lenggenhager, Luregn & Ramutsindela, Maano, 2021. "Property killed a peace park dream: The entanglement of property, politics and conservation along the Gariep," Land Use Policy, Elsevier, vol. 105(C).

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