Localisation barriers to trade: The case of South Africa’s renewable energy independent power program

South Africa’s Renewable Energy Independent Power Projects Procurement Program (REIPPPP) has been hailed as one of the most successful programmes of its kind, contracting 92 renewable energy projects totalling 6 328 MW and US$20.5 billion since its inception in 2011. Despite this success, the programme’s use of non-price factors such as local jobs, local black ownership, local content, and local community ownership in bid evaluation has generated criticism and controversy. Lessons learned in other countries about how and when to use policies like import substitution to promote sustainable economic development seem not to have been fully incorporated by the REIPPPP. We therefore offer a cautionary note that dramatic and impressive localisation results are not inevitable – especially considering the size of the South African market and accompanying investment uncertainties – and that there is bound to be a trade-off between price and non-price factors in these kinds of competitive procurement programmes.     

The debate on the future of the population census: Relevance for South Africa?

The cancellation of the Canadian census long-form questionnaire in 2010 and its subsequent reinstatement in 2015 resulted in a vigorous international debate on the future of the mandatory census. Questions concerning state invasions of personal privacy, party political interference and public trust and cooperation in state data-gathering were raised. As a result, alternative forms of demographic data collection were explored and the experiences of other countries examined. National population registers and non-mandatory surveys offered alternatives, but each had their own distinct disadvantages. South Africa has continued to conduct mandatory detailed censuses since 1994 and the enumerations have encountered little political opposition because they are presented as essentially nation-building exercises providing credible and relevant data, upon which national policies may be based and monitored. At present there is little incentive to change the current format of statistical collection in the absence of a viable alternative.     

Fisher’s hypothesis,survey-based expectations and asymmetric adjustments: Empirical evidence from South Africa

Our study re-examines Fisher’s hypothesis for the South African economy in the post-inflation targeting era and presents two empirical novelties over preceding works for the same country. Firstly, we examine Fisher effect by making use of survey-based inflation expectations data for financial analysts, business sector, trade unions and households, hence making our study more disaggregate in nature. Secondly, we examine both short-run and long-run asymmetric cointegration effects in Fisher’s relation using the nonlinear autoregressive distributive lag (NARDL) model as an econometric framework. For the full quarterly sample of 2002:01 – 2019:04, our study finds interest rates respond more aggressively to falling expectations than rising ones, with a full Fisher effect found for financial analysts, partial effects for households and business, and no effect for trade unions. However, when the data is split into two sub-samples corresponding to pre- and post-financial crisis periods, we observe changing dynamics in which interest rates respond more aggressively to rising inflation, with partial effects being also found for trade unions. Policy recommendations based on our study are offered.

     

Anchors Away: The Cost and Benefits of Brazil’s Devaluation

This paper analyzes the impact of Brazil’s devaluation in 1999. This event represents an abandonment of the exchange rate anchor which had been used as a stabilization plan since the introduction of the Real Plan in 1994. The reasons behind the abandonment of the exchange rate anchor are determined as well as the explanation for its benign impact.     

The problem of defining ‘community’: Challenges for the land reform programme in rural South Africa

This article argues that the use of the term ‘community’ in South Africa's land reform programme has both positive and negative effects on the beneficiaries. Effects are positive when they help focus policy on the needs of poor people, but negative when they force conflicting groups together in a manner which results in the rights of a weaker group being trampled on by the actions of a more powerful group. The article briefly reviews different ways of looking at the concept ‘community’, and then analyses in detail a case from the Wild Coast, where a Spatial Development Initiative (SDI) has raised questions about who should benefit from land reform and economic development. It is concluded that a detailed understanding of local reality, even if it takes time to develop, should be seen as essential to both land restitution and the rights enquiry processes which government policy proposes to employ for resolving conflicting and overlapping claims to tenure rights     

The impact of destination tariffs on China’s exports: Country,firm, and product perspectives

Based on multi-product heterogeneous firm trade theory, we combine China's customs data with the World Integrated Trade Solution’s (WITS) tariff data from 2002 to 2013 and analyze the impact of destination tariffs on China's exports at the country, firm, and product levels. The results reveal that tariffs had a negative effect on country-level exports and their extensive margins. After controlling for the inter-firm composition effect, tariffs had negative effects on firm-level exports and their intensive margins, but positive effects on their extensive margins. After also controlling for the within-firm export composition effect, tariffs had a negative impact on the exports of core products; however, the negative impact diminished as the core grade and technological content of the products increased. Using these elasticities to analyze Sino-U.S. trade frictions, we determine that the additional U.S. tariffs reduced China's exports of high-tech products more than its medium- and low-tech products.     

The impact of financial development on the income and consumption levels of China’s rural residents

In this paper, we investigate the impact of financial development on rural residents’ income and consumption levels in China. We discover that the development of traditional financial services has little impact on the income and consumption levels of rural residents. In contrast, the development of emerging financial services has a significant positive impact on the income and consumption levels of rural residents. Traditional financial services, as is well known, require collateral and high expected future cash flows from customers, making financial inclusion difficult. Emerging financial services in China are special financial services promoted by financial regulators to support technological innovation, cultural development, environmental protection, and rural development. Our findings suggest that these emerging financial services are effective in increasing the income and consumption levels of rural residents. Interestingly, while emerging financial services that directly target rural development have no significant impact on rural residents' income and consumption, financial support for technological advancement and cultural development appears to be more effective in increasing rural residents' income and consumption.     

‘Growing’ social protection in developing countries: Lessons from Brazil and South Africa

The rapid expansion of social protection in the South provides a rich diversity of experiences and lessons on how best to reduce poverty and ultimately eradicate it. Knowledge on how best to ‘grow’ social assistance, understood as long-term institutions responsible for reducing and preventing poverty, is at a premium. This article examines the expansion of social assistance in Brazil and South Africa, two of the middle income countries widely perceived to have advanced furthest in ‘growing’ social protection. It examines three aspects: the primacy of politics in explaining the expansion of social protection and assistance, the tensions between path-dependence and innovation in terms of institutions and practices, and the poverty and inequality outcomes of social assistance expansion. The article concludes by drawing the main lessons for other developing countries.     

Factors impacting on the primary school education of emigrants’ children: The case of Gwanda South,Zimbabwe

The factors that impact on the primary school education of children left behind by cross-border circular emigrants in a poor rural community are examined. Data collected through in-depth interviews and focus group discussions from the emigrants’ children, their teachers, guardians or parents and from community leaders gave insight into these factors. The findings showed that the main factor impacting positively on the education of the emigrants’ children was the ability of the parents to support their children’s education financially. The separation of the emigrants’ children from their parents was a factor that impacted most negatively on their education.     

The road to liberalization: Policy design and implementation of Taiwan’s privatization

Among newly industrializing economies, Taiwan represents an archetypical example of a country in the process of economic catching up with institutional environments standing somewhere between Western and transition countries. Thus, Taiwan’s privatization experience may provide a means to assess the generalizability of conclusions drawn from prior research conducted in both kinds of countries. In the face of changing economic and political environments, Taiwan revamped its blueprint for privatization in 1989 as a major plank of its economic shift toward liberalization. Although it has proceeded on a trial-and-error basis, the policy has thus far yielded substantial though mixed results. This study systematically reviews Taiwan’s policy design and implementation of privatization, which originally was modeled on but later diverged from the Western experience as a result of the immature institutional settings and political compromises in various regards. Taiwan’s privatization, in a relative small scale to those in transition economies, is characterized by a set of stylized policy initiatives that provide a reference point for other developing countries.

The effect of foreign direct investment on firm growth: the case of Taiwan’s manufacturers

Foreign direct investment (FDI) can be roughly separated into an expansionary type and a defensive type. Expansionary FDI seeks to exploit the firm-specific advantage in the host country whereas defensive FDI seeks cheap labor in the host country to reduce the cost of production. Based on Taiwanese data, we examine the effects of these two types of FDI on survival and growth performance of investing firms. Both types of FDI are shown to be beneficial to the survival of firms. Expansionary FDI has the additional benefit of contributing to the sales growth of investing firms at home while defensive FDI is neutral to sales growth. Both types of FDI are also shown to be uncorrelated with job creation or job displacement at home. Our results suggest that FDI will strengthen rather than weaken the viability and competitiveness of domestic industries. It cannot be blamed for industrial ‘hollowing-out’.     

Deconstructing ‘the foreign’: The limits of citizenship for explaining price competition in the Spaza sector in South Africa

An important component of the informal economy in South Africa, the Spaza sector is portrayed as dominated by foreign nationals who outcompete South African shopkeepers on price. Indeed, this business competition from foreign nationals is a key reason given to explain xenophobia in South Africa. This article sets out to interrogate this widely held assumption. Drawing on evidence from over 1000 Spaza shops from South Africa’s three main cities, the article makes the case that business competitiveness does not correspond with ‘foreign’ or South African identities in a simple way. Firstly, while citizenship or nationality is a factor, it is not captured by the labels of ‘foreign’ versus South African, as there are significant differences by nationality within the ‘foreign’. Secondly, not all foreign nationalities out-compete South Africans on price. Thirdly, place matters too, not only because we find different nationalities in different cities, but also because there are different patterns of price competition by nationality in each place. Lastly, there are product-specific dynamics that impact on price more profoundly than nationality. For example, regardless of nationality, milk is cheaper in Cape Town and bread is cheaper in Johannesburg.     

The impact of the institutional and infrastructural environment on innovation-based development in today’s world

This paper provides a comparative assessment of innovation-based development in Russia and several OECD and BRICS countries. Several tiers of countries have been introduced based on the assessment. The impact of various factors on innovation performance has been calculated for each tier using the tier average values of indicators that correspond to these factors. As a result, the most common features that are typical for a given level of development of an innovation environment are identified. The analysis provides a basis for recommendations regarding a strategy for innovation-based development of the Russian Federation.     

The effects of fuelwood on children’s schooling in rural Vietnam

Gathering fuelwood for cooking and heating represents a considerable time burden for households in rural Vietnam. In this paper we examine the effects of fuelwood use on children’s school attendance using a panel of households from the Vietnam Living Standards Survey. We match individual households to satellite imagery measuring leaf coverage at the time and location of each survey, providing a robust instrument to examine the impacts of resource collection on schooling. We find that using fuelwood as the primary energy source is associated with an 84 percentage point decrease in the likelihood of school enrollment. We also find mixed evidence that girls may be affected more severely than boys, but we are unable to rule out equal impacts across genders. Our results suggest that household energy choices and diminishing resource availability can have a lasting impact on childhood schooling and long-run poverty.