Abstract This paper extends the model of Fielding [J. Dev. Econ. 58 (1999) 405.], which is designed to explain changes in investment in South Africa during the Apartheid period, by allowing a role for indicators of political instability and political and civil rights, as measured by Fedderke et al. [Fedderke, J., de Kadt, R., Luiz, J., 1999. Indicators of Political Liberty, Property Rights and Political Instability in South Africa: 1935–97, ERSA Working Paper 4, University of the Witwatersrand. The conclusions based on estimation of the original model are robust to the inclusion of the political factors, but these factors do explain some of the variation in investment over time.