Public Sector Growth in the British Cape Colony: Evidence From New Data on Expenditure and Foreign Debt, 1830‐1910

Abstract

The public expenditure shifts that took place following the discovery of diamonds and gold during the second half of the nineteenth century had far-reaching consequences for southern Africa's development. Using new data for public expenditure and foreign debt in the Cape Colony and evidence from Cape parliamentary budget debates, we trace and explain the growth of the public sector. We find that the coincidence of mineral discovery in 1867 and the granting of responsible government status rapidly accelerated the growth of the public sector. Owing to strong mining interests, railways accounted for more than 70% of the public works expenditure from the 1880s onwards. Spending on human capital and welfare enhancement remained limited. Both the quantitative and qualitative evidence suggests that the mining elites managed to build coalitions that swayed public expenditure decisions towards self-serving ends.

Domestic revenue mobilisation in developing countries: An exploratory analysis of sub‐Saharan Africa and Latin America

“…Most developing countries have struggled to govern and tax extractive sectors (Moore et al, 2018, p. 94). In SSA, this challenge has historical roots in colonial taxation and expenditure (Gardner, 2012;Gwaindepi, 2018;Gwaindepi & Fourie, 2020;Gwaindepi & Siebrits, 2019. Difficulties in managing or organising extractive sectors have manifested in unjustified tax exemptions, questionable deals that have enriched local elites and outright corruption.…”

‘Hit your man where you can’: Taxation strategies in the face of resistance at the British Cape Colony, c.1820 to 1910

“…Rhodes, in particular, also skilfully used the established mechanism of informal alliances to mobilize support in the Cape Parliament for initiatives that benefitted the mining industry (cf Rotberg 1988, 133). Gwaindepi and Fourie (2020) have also shown supporting evidence through the Cape's public expenditure policies. Hence, the success of champions of the mining industry at resisting taxes and attaining other benefits is reminiscent of Khan's (2018, 640) statement that the power of organizations is based on 'the capacity of their leadership to mobilize and enthuse, and their skill in identifying and rewarding the right people through formal or informal networks'.…”

Uneven reproduction: Gender, race, class, and birth outcomes

“…The British ushered in transformation in the Cape Colony that included an agricultural, pastoral, and industrial‐based economy. While generally most European governments did not fund health services, there were some investments and public sector expenditures including health related expenditures to accommodate the Colony's growth (Gwaindepi & Fourie, 2020).…”

“…Infrastructural investments expanded along with the Cape's economy (Gwaindepi & Fourie, 2020). According to historian Helen Tilley (2016) funds were earmarked for social welfare and medical personnel.…”