Economics

Most historians regard the Cape Colony of the seventeenth and eighteenth centuries as an impoverished and destitute settlement, primarily because of the many restrictions and prohibitions enforced by the Dutch East India Company, who founded the Cape settlement as a refreshment station for its ships. The mercantilist thinking of the time ensured that the free burghers in the Cape were to comply with the demands of the Company, dependent on the number of passing ships, for a market, and with little economic incentive to expand production. This assumption of poor economic performance only came to be challenged in the late 1980s. Using new data collected from the so-called opgaaf rolls (tax return records) in The Hague, argue that, in fact, the Cape economy grew signi…cantly throughout the eighteenth century. However, these authors emphasise that local demand played the dominant role in the development of the economy and dismiss the traditional argument that passing ships were essential to the welfare of the Cape Colony. Using new empirical evidence on the number of ships in combined with techniques from business cycle theory, this paper tests whether ship tra¢ c had any signi…cant relationship with agricultural production in the Cape Colony and, if so, the direction and size of association. The results suggest a strong systematic co-movement between wheat and ship tra¢ c in , with less evidence for wine production and stock herding activities.

This paper examines the state and scope of the study of economic history of developing regions, underlining the importance of knowledge of history for economic development. While the quality of the existing research on developing countries is impressive, the proportion of published research focusing on these regions is low. The dominance of economic history research on the North American and Western European success stories suggests we need a forum for future research that contributes to our understanding of how institutions, path dependency, technological change and evolutionary processes shape economic growth in the developing parts of the world. Many valuable data sets and historical episodes relating to developing regions remain unexplored, and many interesting questions unanswered. This is exciting. Economic historians and other academics interested in the economic past have an opportunity to work to begin to unlock the complex reasons for differences in development, the factors behind economic disasters and the dynamics driving emerging success stories.