Johan Fourie

The significance of the Cape trade route to economic activity in the Cape Colony: a medium-term business cycle analysis

Trade is a critical component of economic growth in newly settled societies. This article tests the impact of ship traffic on the Cape economy using a time-series smoothing technique borrowed from the business cycle literature and employing an econometric procedure to test for long-run relationships. The results suggest a strong systematic co-movement between wheat production and ship traffic, with less evidence for wine production and stock-herding activities. While ship traffic created demand for wheat exports, the size of the co-movement provides evidence that ship traffic also stimulated local demand through secondary and tertiary sector activities, supporting the hypothesis that ship traffic acted as a catalyst for growth in the Cape economy.

The Remarkable Wealth of the Dutch Cape Colony: Measurements from Eighteenth‐Century Probate Inventories

How comfortable was the life of the average settler in the Dutch Cape Colony of the eighteenth century? The generally accepted view is of a poor, subsistence economy, with little progress being made in the 143 years of Dutch rule (1652–1795). This article shows that new evidence from probate inventory and auction roll records contradicts earlier historical accounts. These documents bear witness to a relatively affluent settler society, comparable to some of the most prosperous regions of eighteenth‐century England and Holland. This detailed picture of the material wealth of the Colony should inspire a revision of the standard accounts. The causes and consequences of this prosperity are also considered briefly.

The South African poor white problem in the early 20th century: Lessons for poverty today

The causes of the poor white problem, first noted at a Dutch Reformed Church Synod in 1886, were unclear; many blamed the inadequate education system, urbanisation, cheap wages or cultural factors, while others argued that external events such as the rinderpest disease or the Anglo-Boer war added to the numbers of poor whites. Today, poverty is still at the heart of many policy debates in South Africa. A bad educational legacy, urbanisation, labour legislation, culture and tradition, and external factors are still amongst the factors said to be the causes of poverty. This paper assesses the similarities and differences between black poverty today and white poverty a century ago, and suggests possible policy lessons to learn from the past.

South African Mega-sport Events and Their Impact on Tourism

The 2010 Fédération Internationale de Football Association (FIFA) World Cup, one of the largest mega-sport events in the world, has stirred renewed interest in the benefits that a host country can derive from such events. While most predict a large increase in the number of tourist arrivals in South Africa during the event, recent international literature suggests that ex ante studies are often too optimistic. South Africa has played host to numerous mega-events since 1994. Using a time-series lagged regression model, we identify the increases in tourism numbers experienced for most such events, controlling for a number of variables, which are standard to the prediction of tourism flows. Smaller events, especially those held during the summer months, show little increase in tourist arrivals. We disaggregate tourism arrivals to show that, as expected, the number of tourists from participating countries tends to increase the most. Contrary to the findings revealed in the international literature, we find little evidence of between-country displacement. This lack of evidence may be as a result of off-season scheduling or because the relative size of such events reflects neither that of the FIFA World Cup nor that of the Olympic Games.

A History With Evidence: Income inequality in the Dutch Cape Colony

ABSTRACT The arrival of European settlers at the Cape in 1652 marked the beginning of what would become an extremely unequal society, with ramifications into modern-day South Africa. In this paper, we measure income inequality at three different points over the first century of Dutch rule at the Cape. What emerges from the study is a society characterised by severe inequality, with a relatively poor farming population combined with pockets of wealth. The inequality is driven largely by wheat and, especially, wine production, which gave rise to an elite. Historical evidence supports our findings: Amongst others, the imposition of sumptuary laws in 1755 is closely correlated with a more segmented elite which includes both alcohol merchants and (wine) farmers. We compare these measures to those of other regions and time-periods in history. Although the exact level of inequality is determined to a large extent by our assumptions, the Cape Colony registers one of the highest Gini-coefficients in pre-industrial societies. This provides some support to verify the Engerman-Sokoloff hypothesis that initial levels of high inequality would give rise to growth-debilitating institutions, resulting in higher inequality and underdevelopment.

A note on infrastructure quality in South Africa

In South Africa the emphasis, both in research and in policy-making, seems to be more on the quantity of infrastructure than on improving its quality. This research note critically analyses the lack of quality indicators in quantitative infrastructure research, with the aim of redirecting attention to improving the quality of infrastructure in South Africa.

The Data Revolution in African Economic History

The recent surge in computing power and access to data-processing software and online resources enables historians to capture historical statistics on a much larger scale than before. The data revolution—encompassing unprecedented advances in data transcription, augmentation, and collaboration—is especially valuable for studying the history of regions where written records are scarce, such as sub-Saharan Africa. The digitization of large numbers of colonial and postcolonial records offers much promise for a greater understanding of Africa’s economic past.

Infrastructure in South Africa: Who is to finance and who is to pay?

Against the backdrop of shifting views on the role of government in the provision of infrastructure, this paper distinguishes between the payment for and financing of the South African Governments infrastructure investment programme. The paper argues for a clear distinction between loan financing by the government for macroeconomic considerations and the benchmark approach to the financing of infrastructural projects. It presents a classification system that enables a systematic mapping of all prospective projects, with reference to considerations of efficiency and equity, and uses this system to question the governments financing strategy and identify alternatives. The Gautrain Rapid Rail project is used as a case study to demonstrate these alternatives.

The determinants of African tourism

Using a standard panel gravity equation of 175 origin/destination countries between 1995 and 2008, 43 of which are African, we identify the factors that drive African-inbound (arrivals to Africa from other continents) and within-African tourism (arrivals from and to an African country). We find that the determinants of African-inbound and within-African tourism are not all that different from global tourism flows; repeat tourism, income, distance, land area and the standard dummy variables not only drive global or OECD tourism, but also tourism within Africa, disproving the belief that African tourists ‘differ substantially’.

Tourist displacement in two South African sport mega-events

Crowding-out (or displacement) of non-event visitors has received little attention in the literature on the impact of sports events, largely because it cannot be measured accurately. This paper discusses such effects in conceptual terms and reports the results of an analysis of data on tourist arrivals in South Africa aimed at estimating the displacement effects of two sports events held in 2009: the Indian Premier League cricket tournament and the British and Irish Lions rugby tour. Using monthly tourist arrivals in South Africa from specific countries, we find that some tourists from countries not participating in these events were displaced; the much stronger effect, however, was that tourists from the participating countries re-arranged their visits to coincide with an event. While confirming the inherent difficulty of measuring crowding-out effects, this paper shows that characteristics of events can sometimes be exploited to obtain useful information on displacement from readily available data.