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

Alan Dye and Sumner La Croix

Economic History Review, 2020, vol. 73, issue 1, 33-58

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.

Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://doi.org/10.1111/ehr.12817

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ehsrev:v:73:y:2020:i:1:p:33-58

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0013-0117

Access Statistics for this article

Economic History Review is currently edited by Stephen Broadberry

More articles in Economic History Review from Economic History Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().