Skip to main content Accessibility help
×
Hostname: page-component-78c5997874-j824f Total loading time: 0 Render date: 2024-11-06T18:07:07.379Z Has data issue: false hasContentIssue false

9 - How Mineral Discoveries Shaped the Fiscal System of South Africa

Published online by Cambridge University Press:  15 November 2019

Ewout Frankema
Affiliation:
Wageningen Universiteit, The Netherlands
Anne Booth
Affiliation:
School of Oriental and African Studies, University of London
Get access

Summary

South Africa made remarkable progress from 1850 to 1961 with the establishment of a ‘modern’ fiscal state. This chapter shows that the discovery of diamonds and gold in the second half of 19th century facilitated the modernization of the country's fiscal system by providing the impetus for modern economic growth and by generating vast resources for the financing of infrastructure and essential social services. It also identifies two consequences of apartheid that negated vital potential benefits of the fiscal modernization process: the state could not achieve the legitimacy needed for political stability and long-term economic development, and the economic diversification that is essential for sustained economic progress in economies built on the extraction of exhaustible resources was thwarted by the debilitating effects of apartheid on policy priorities and the country's skills base. The main conclusion of the chapter therefore is that apartheid prevented South Africa from capitalizing on the opportunities afforded by its mineral wealth and otherwise solid governance foundations.

Type
Chapter
Information
Publisher: Cambridge University Press
Print publication year: 2019

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Accominotti, O., Flandreau, M., Rezzik, R., & Zumer, F. (2010). Black Man’s Burden, White Man’s Welfare: Control, Devolution and Development in the British Empire, 1880–1914. European Review of Economic History, 14(1), 4770.Google Scholar
Auty, R. (2008). Natural Resources and Development. In Dutt, A. K. & Ros, J. (Eds.), International Handbook of Development Economics. Cheltenham: Edward Elgar, 288403.Google Scholar
Blattman, C., Hwang, J., & Williamson, J. G. (2007). Winners and Losers in the Commodity Lottery: the Impact of Terms of Trade Growth and Volatility in the Periphery 1870–1939. Journal of Development Economics, 82(1), 156–79.Google Scholar
Booth, A. (2007). Night Watchmen, Extractive, or Developmental States? Some Evidence from Late Colonial South-East Asia. Economic History Review, 60(2), 241–66.Google Scholar
Bromberger, N. (1982). Government Policies Affecting the Distribution of Income, 1940–1980. In Schrire, R. (Ed.), South Africa: Public Policy Perspectives. Cape Town: Juta, 165203.Google Scholar
Browne, G. W. G. (1973). Fiscal Policy in South Africa. In Lombard, J. A. (Ed.), Economic Policy in South Africa: Selected Essays. Cape Town: HAUM Publishers, 125.Google Scholar
Browne, G. W. G. (1983). Fifty Years of Public Finance. South African Journal of Economics, 51(1), 134–73.CrossRefGoogle Scholar
Browne, G. W. G., & Jones, J. (1961). Die staat se leningsuitgawes and hul finansiering. In Steyn, D. H. (Ed.), Inleiding tot die Suid-Afrikaanse Staatsfinansies. Pretoria: J.L. van Schaik, 173214.Google Scholar
Buchanan, J. M., & Wagner, R. (1977). Democracy in Deficit: the Political Legacy of Lord Keynes. Indianapolis: The Liberty Fund.Google Scholar
Bureau of Census and Statistics. (1960). Union Statistics for Fifty Years. Pretoria: Bureau of Census and Statistics.Google Scholar
Calitz, E., du Plessis, S. A., & Siebrits, F. K. (2009). Institutions and the Sustainability of Fiscal Policy in South Africa, 1960–2008. Unpublished paper delivered at the 15th World Economic History Congress in Utrecht (The Netherlands). 3–7 August 2009.Google Scholar
Chenery, H. B. (1979). Structural Change and Development Policy. Washington, DC: The World Bank.Google Scholar
Davenport, T. R. H., & Sanders, C. (2000). South Africa: a Modern History. 5th ed. Basingstoke: Macmillan Press.CrossRefGoogle Scholar
De Kock, M. H. (1924). Selected Subjects in the Economic History of South Africa. Cape Town: Juta.Google Scholar
De Kock, M. H. (1927). An Analysis of the Finances of the Union of South Africa. 2nd ed. Cape Town: Juta.Google Scholar
De Kiewiet, C. W. (1957). A History of South Africa: Social and Economic. Cape Town: Oxford University Press.Google Scholar
Duff, S. E. (2012). ‘Education for Every Son and Daughter of South Africa’: Race, Class, and the Compulsory Education Debate in the Cape Colony. In Brockliss, L. & Sheldon, N. (Eds.), Mass Education and the Limits of State Building, c.1870–1930. Basingstoke: Palgrave Macmillan, 261–82.Google Scholar
Du Plessis, S. A., & du Plessis, S. W. F. (2017). Which Comes First: Good Governance or Prosperity? A Historical Experiment from the South African Republic and the Orange Free State. ERSA Working Paper No. 691. Cape Town: Economic Research Southern Africa.Google Scholar
Fedderke, J. W. (2014). Exploring Unbalanced Growth in South Africa: Understanding the Sectoral Structure of the South African Economy. ERSA Working Paper No. 468. Cape Town: Economic Research Southern Africa.Google Scholar
Feinstein, C.H. (2005). An Economic History of South Africa: Conquest, Discrimination and Development. Cambridge: Cambridge University Press.Google Scholar
Fourie, J. (2013). The Remarkable Wealth of the Dutch Cape Colony: Measurements from Eighteenth-Century Probate Inventories. Economic History Review, 66(2), 419–48.Google Scholar
Fourie, J., & van Zanden, J. L. (2013). GDP in the Dutch Cape Colony: the National Accounts of a Slave-Based Society. South African Journal of Economics, 81(4), 467–90.Google Scholar
Frankema, E. (2011). Colonial Taxation and Government Spending in British Africa, 1880–1940: Maximising Revenue or Minimising Effort? Explorations in Economic History 48(1), 136–49.Google Scholar
Frankema, E. (2012). The Origins of Formal Education in Sub-Saharan Africa: Was British Rule More Benign? European Review of Economic History, 16(4), 335–55.Google Scholar
Freund, W. M. (2011). South Africa: the Union years, 1910–1948: Political and Economic Foundations. In Ross, R., Mager, A. K. & Nasson, B. (Eds.), The Cambridge History of South Africa, vol. 2: 1885–1994. Cambridge: Cambridge University Press, 211–53.Google Scholar
Gardner, L. (2012). Taxing Colonial Africa: the Political Economy of British Imperialism. Oxford: Oxford University Press.Google Scholar
Gilbert, D. W. (1933). The Economic Effects of the Gold Discoveries upon South Africa: 1886–1910. Quarterly Journal of Economics, 47(4), 553–97.Google Scholar
Government of the Cape Colony. (Various years). Blue Books. Cape Town: Government Printer.Google Scholar
Hobart-Houghton, D. (1964). The South African Economy. Oxford: Oxford University Press.Google Scholar
Hobart-Houghton, D. (1971). Economic Development, 1865–1965. In Wilson, M. & Thompson, L. (Eds.), The Oxford History of South Africa, vol. 2: South Africa, 1870–1966. Oxford: Oxford University Press, 148.Google Scholar
Holloway, J. E. (1954). South African Public Finance and Taxation, 1933–1953. South African Journal of Economics, 22(1), 107–14.Google Scholar
Horwitz, R. (1967). The Political Economy of South Africa. London: Weidenfeld and Nicolson.Google Scholar
Hunt-Davis, R. (1984). The Administration and Financing of African Education in South Africa, 1910–1953. In Kallaway, P. (Ed.), Apartheid and Education: The Education of Black South Africans. Johannesburg: Ravan Press, 127–38.Google Scholar
Hyslop, J. (2005). Political Corruption: Before and after Apartheid. Journal of Southern African Studies, 31(4), 773–89.Google Scholar
International Centre for Tax and Development. (2017). Government Revenue Dataset (July 2017 version). Brighton: Sussex University, Institute of Development Studies. www.ictd.ac/datasets/the-ictd-government-revenue-dataset (accessed 25 January 2018).Google Scholar
Johnstone, F. A. (1976). Race, Class and Gold. London: Kegan Paul.Google Scholar
Lienert, I. (2003). A Comparison between Two Public Expenditure Management Systems in Africa. OECD Journal on Budgeting, 3(3), 3566.Google Scholar
Lipton, M. (1986). Capitalism and Apartheid: South Africa, 1910–1986. Cape Town: David Philip.Google Scholar
Maddison, A. (2001). The World Economy: A Millennial Perspective. Paris: Organisation for Economic Co-Operation and Development.Google Scholar
Maddison, A. (2003). The World Economy: Historical Statistics. Paris: Organisation for Economic Co-Operation and Development.Google Scholar
Magee, G.B., Greyling, L. & Verhoef, G.. (2016). South Africa in the Australian Mirror: Per Capita Real GDP in the Cape Colony, Natal, Victoria, and New South Wales, 1861–1909. Economic History Review, 69(3), 893914. Online data appendix: http://onlinelibrary.wiley.com/doi/10.1111/ehr.12125/suppinfo.CrossRefGoogle Scholar
Malherbe, E.G. (1925). Education in South Africa (1652–1922). Cape Town and Johannesburg: Juta and Company.Google Scholar
Malherbe, E. G. (1977). Education in South Africa (1923–1975). Cape Town and Johannesburg: Juta and Company.Google Scholar
McCracken, J. L. (1967). The Cape Parliament, 1854–1910. Oxford: Clarendon Press.Google Scholar
Mehlum, H., Moehne, K., & Torvik, R. (2006). Institutions and the Resource Curse. Economic Journal, 116(508), 120.Google Scholar
Mitchell, B. R. (1998). International Historical Statistics: Africa, Asia and Oceania. 3rd ed. London: Macmillan.Google Scholar
Moll, T. (1991). Did the Apartheid Economy ‘Fail’? Journal of Southern African Studies, 17(2), 271–91.Google Scholar
Moll, T. (1993). Macroeconomic Policy in Turbulent Times. In Lipton, M. & Simkins, C. E. W. (Eds.), State and Market in Post-Apartheid South Africa. Johannesburg: Witwatersrand University Press, 235–69.Google Scholar
Molteno, F. (1984). The Historical Foundations of the Schooling of Black South Africans. In Kallaway, P. (Ed.), Apartheid and Education: The Education of Black South Africans. Johannesburg: Ravan Press, 45107.Google Scholar
Nattrass, N. (1991). Controversies about Capitalism and Apartheid in South Africa: An Economic Perspective. Journal of Southern African Studies, 17(4), 654–77.CrossRefGoogle Scholar
Nattrass, N., & Seekings, J. (2011). The Economy and Poverty in the Twentieth Century. In Ross, R., Mager, A. K. & Nasson, B. (Eds.), The Cambridge History of South Africa, vol. 2: 1885–1994. Cambridge: Cambridge University Press, 518–72.Google Scholar
Plant, A. (1936).Economic Development, 1795–1921. In Newton, A. P., Benians, E. A. & Walker, E. A. (Eds.), The Cambridge History of the British Empire, vol. 8: South Africa, Rhodesia and the Protectorates. Cambridge: Cambridge University Press, 759807.Google Scholar
Posel, D. (1999). Whiteness and Power in the South African Civil Service: Paradoxes of the Apartheid State. Journal of Southern African Studies, 25(1), 99119.CrossRefGoogle Scholar
Robinson, J. A., Torvik, R., & Verdier, T. (2006). Political Foundations of the Resource Curse. Journal of Development Economics, 79(2), 447–68.Google Scholar
Ross, M. L. (2004). What Do We Know about Natural Resources and Civil War? Journal of Peace Research, 41(3), 337–56.Google Scholar
Rotberg, R. I. (1988). The Founder: Cecil Rhodes and the Pursuit of Power. Oxford: Oxford University Press.Google Scholar
Saul, J., & Gelb, S. (1986). The Crisis in South Africa. London: Zed Books.Google Scholar
Savage, M. (1986). The Imposition of Pass Laws on the African Population in South Africa 1916–1984. African Affairs, 85(339), 181205.Google Scholar
Schumann, C. G. W. (1938). Structural Change and Business Cycles in South Africa, 1806–1936. London: P.S. King and Son.Google Scholar
Sokoloff, K. L., & Zolt, E. M. (2007). Inequality and the Evolution of Institutions of Taxation: Evidence from the Economic History of the Americas. In Edwards, S., Esquivel, G. & Márquez, G. (Eds.), The Decline of Latin American Economies: Growth, Institutions, and Crises. Chicago: University of Chicago Press and National Bureau of Economic Research, 83136.Google Scholar
Sunderland, D. (2004). Managing British Colonial and Post-Colonial Development: The Crown Agents, 1914–1974. Woodbridge: Boydell and Brewer.Google Scholar
Szirmai, A. (2012). Industrialisation as an Engine of Growth in Developing Countries, 1950–2005. Structural Change and Economic Dynamics, 23(4), 406–20.Google Scholar
Tames, R. (2005). Economy and Society in 19th Century Britain. London: Routledge.Google Scholar
Tanzi, V., & Schuknecht, L. (2000). Public Spending in the 20th Century. Cambridge: Cambridge University Press.Google Scholar
Thompson, L. (2000). A History of South Africa. 3rd ed. New Haven: Yale University Press.Google Scholar
Tun Wai, U. (1962). Taxation Problems and Policies of Underdeveloped VCountries. IMF Staff Papers, 9(3), 428–48.Google Scholar
United Nations. (1948). Public Debt, 1914–1946. New York: United Nations, Fiscal Division of the Department of Economic Affairs.Google Scholar
United Nations. (Various years). Statistical Yearbook. New York: United Nations, Statistics Division of the Department of Economic and Social Affairs.Google Scholar
Van der Berg, S. (1997). South African Social Security under Apartheid and Beyond. Development Southern Africa, 14(4), 481503.Google Scholar
Van Helten, J. J. (1978). German Capital, the Netherlands Railway Company and the Political Economy of the Transvaal 1886–1900. Journal of African History, 19(3), 369–90.Google Scholar
Van Waasdijk, T. (1964). Public Expenditure in South Africa: A Study of the Growth, Co-Ordination and Control of Budgets. Johannesburg: Witwatersrand University Press.Google Scholar
Welsh, F. (2000). A History of South Africa. London: Harper Collins Publishers.Google Scholar
Wenar, L. (2008). Property Rights and the Resource Curse. Philosophy and Public Affairs, 36(1), 232.Google Scholar

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×