South Africa made remarkable progress from 1850 to 1961 with the establishment of a ‘modern’ fiscal state. This chapter shows that the discovery of diamonds and gold in the second half of 19th century facilitated the modernization of the country's fiscal system by providing the impetus for modern economic growth and by generating vast resources for the financing of infrastructure and essential social services. It also identifies two consequences of apartheid that negated vital potential benefits of the fiscal modernization process: the state could not achieve the legitimacy needed for political stability and long-term economic development, and the economic diversification that is essential for sustained economic progress in economies built on the extraction of exhaustible resources was thwarted by the debilitating effects of apartheid on policy priorities and the country's skills base. The main conclusion of the chapter therefore is that apartheid prevented South Africa from capitalizing on the opportunities afforded by its mineral wealth and otherwise solid governance foundations.

This chapter surveys the fiscal policies and practices in the Portuguese African colonies of Mozambique and Angola from the 1850s to 1970s. It explores the fiscal implications of a long history of trade relations and cultural exchange, including early forms of colonial settlement (merchants, missionaries, prazeros), which were moulded into a relatively late and severely contested occupation wave in the late nineteenth century. It discusses the constraints to revenue centralization and fiscal unification and shows how spending policies prioritized security, administration and infrastructure over welfare services. I argue that local conditions, including this specific ‘pre-colonial’ history of Portuguese-African relations, limited possibilities of fiscal modernization, while major ruptures in metropolitan politics (e.g. the Salazar dictatorship) were key in the reorganization of imperial finances.

This chapter examines the changing role of the state in Southeast Asia in the decades from 1900 through to 1960, a period which covers the last phase of colonialism in the region, and the transition to independence. To what extent did colonial governments establish modern fiscal states in the region? By the end of the nineteenth century the three main European colonial powers, Britain, France and the Netherlands, all controlled substantial territories in the region. The Spanish, who had occupied the Philippine islands since the seventeenth century, ceded control to the Americans after their defeat in the Spanish-American War at the end of the nineteenth century. Siam, which became Thailand at the end of the 1930s, had managed to remain independent, although at the cost of losing territory to both British and French possessions. This chapter compares and contrasts revenue, expenditure and borrowing policies across the major colonial territories and Thailand, and examines the transition to independence in the years from 1946 to 1963, when the Federation of Malaysia was formed.

East and Central Africa were among the last regions to be colonized by European powers in the late nineteenth and early twentieth centuries. Due to limited trade with the region, along with more fragmented indigenous political organization in many colonies, colonial governments faced a particularly challenging task of establishing fiscal systems which would support the conquest and rule of these territories. This chapter examines the ways they tried to overcome these difficulties, focusing on the histories of the Belgian Congo, Kenya, Nyasaland, Northern Rhodesia, Southern Rhodesia, Tanganyika and Uganda. In all of these, the imperial powers made use of older tools of colonial rule, including settlement and the outsourcing of government to chartered companies, but the implementation of these were shaped by the circumstances of the period. The chapter argues that these early policies influenced the development of both taxation and public spending during and after the colonial period. In particular, colonial and post-independence governments were more dependent on direct taxation, and faced fierce debates about the distribution of public spending.