When did globalization begin in South Africa?

Stellenbosch Working Paper Series No. Wp10/2015
 
Publication date: 2015
 
Author(s):
[protected email address] (Department of Economics, University of Stellenbosch)
[protected email address] (Department of Economics, University of Stellenbosch)
 
Abstract:

Economic globalization is defined as the co-movement of prices across a large number of countries (O’Rourke and Williamson, 2002). This research note identifies the period when South African prices began to move in unison with those of the country’s lead trading partner or, in other words, when South Africa globalized. We find that South African wheat prices started reflecting UK trends soon after the discovery of diamonds and gold in the interior of the country. The mineral revolution, it seems, was responsible for integrating the broader South African economy – here proxied by agricultural prices – into the global economy. We further show that this integration was not confined to Cape Town; the coming of the railways ensured that markets in the larger Western and Eastern Cape and, importantly, the town of Kimberley, were well integrated with those in Cape Town. We therefore establish the start of South Africa’s globalization in the 1870s.

 
JEL Classification:

F63, N17

Keywords:

globalization, trade, periphery, colonialism, railways, Africa

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BER Weekly

26 June 2017
Investor sentiment soured last week following a recommendation by the Public Protector, Busisiwe Mkhwebane, that the mandate of the South African Reserve Bank (SARB) be amended to exclude the clause "to protect the value of the currency". This saw a sell-off in the rand, which was already under pressure following the announcement of the new Mining Charter...

Read the full issue