The Origin of Extractive States in Africa: The Case of the British Cape Colony, 1834-1909

The majority of African states continue to be regarded as extractive
states. We use the Cape Colony’s public expenditure to account for the
emergence of extractive states in Africa. With a sub-imperial role for
Sothern African colonial expansion, the Cape Colony became a template
for extractive practices that continue to characterize the region. Using
public expenditure data, budget debates and existing historiography, we
trace the elite competition for limited public resources that associated
the Cape’s transition from an agrarian society to a mining-led economy.
We find that the mining elites managed to make dominant coalitions that
derailed public expenditure decisions towards self-serving ends. With political
and economic influence, their desires could not be vetoed in budgets
votes and this inevitably gave the state its extractive character. The competing
interests of farmers and miners/industrialists; the lack of capital for
infrastructure investment; and limited executive constraints —widespread
features of modern African economies — led to state capture by a narrow
elite. The main lessons derived are that narrow/limited democratic spaces,
politics of personalities, exclusion based on race or class and monopolies
in key economic sectors are breeding grounds for extractive states.