An economic appraisal of a South African producer co‐operative

In an earlier article in this journal, the authors analysed the financial results of a South African producer co‐operative over a ten‐year period. The study focused on the commercial viability of the cooperative in terms of the exigencies of the market place expressed in current prices. In the present study, cost‐benefit techniques are used to extend the analysis to an investigation of the economic viability of the co‐operative and an assessment of whether scarce financial and other resources have been misallocated. The concept of investment cost per Job is widened to include the cost of maintaining a Job. Various scenarios such as sales growth, lower wages and the benefits of government incentives were simulated to analyse the viability of the enterprise under differing conditions.     

A quantitative appraisal of national economic policy

Zusammenfassung Eine quantitative Bewertung der Volkswirtschaftspolitik. Der Fall Japan. — Der Zweck des vorliegenden Aufsatzes besteht darin, die vorl?ufigen Ergebnisse einer quantitativen Analyse der Wirtschaftspolitik für Japan vorzulegen, die aus einem Modell für eine kurzfristige ?konomische Vorausschau entwickelt wurden. Zun?chst wurde ein Lohn-Preis-Spirale-Mechanismus in die Gleichungen eingeführt. Zweitens wurden Identit?tsgleichungen sowohl in laufenden Preisen als auch in realen Werten aufgestellt, um wirtschaftspolitisch orientierte Experimente zu erleichtern, da die meisten Variablen der Wirtschaftspolitik in laufenden Preisen ausgedrückt sind. Drittens wurden die durchschnittlichen Zinss?tze für Kredite aller Handelsbanken, die durch den Diskontsatz der Bank von Japan reguliert werden, ebenso wie das j?hrliche Verh?ltnis zwischen den laufenden Posten der Zahlungsbilanz zum Bruttosozialprodukt als Schlüsselvariable für wirtschaftspolitische Experimente berücksichtigt und als erkl?rende Variable in die Gleichungen sowohl für die Bildung von privatem Anlagekapital als auch für die Schwankungen bei der nichtlandwirtschaftlichen Lagerhaltung eingeführt. Au\erdem wurde die Kapazit?tsausnutzungsindex-Variable eingeführt, die aus den sektoralen Produktionsindizes durch Anwendung der Wharton-School-Methode gebildet wurde. Die systematische Ann?herung an das Problem der quantitativen Bewertung der Wirtschaftspolitik beruht auf einem ?konomischen Modell, das folgende drei Methoden verwendet: 1. Die Multiplikatoranalyse, 2. Simulationsexperimente und 3. einen Durchführbarkeitstest (feasibility test). Die Ergebnisse dieser Methoden werden dargestellt, und zum Schlu\- werden die Resultate des ?feasibility tests? diskutiert.

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Résumé Une évaluation quantitative de la politique économique nationale. Le cas du Japon. — Cet article présente les résultats de première tentative d’une analyse économique quantitative de la politique économique du Japon, résultats provenant d’un modèle de prévision économique à court terme. On a d’abord introduit dans les équations un mécanisme de spirale salaires-prix. Puis, on a pris en considération les identités exprimées en valeurs courantes aussi bien qu’en valeurs réelles, afin de faciliter les expériments de politique économique, puisque la plupart des variables de politique économique sont spécifiées par les valeurs courantes. Troisièmement, le taux moyen d’intérêt sur les prêts de toutes les banques commerciales — réglé par le taux d’escompte de la banque centrale — ainsi que la relation annuelle entre le compte courant de la balance des paiements et le produit national brut ont été considérés comme les variables principales dans les expériments de politique économique. Ils ont donc été introduits comme variables explicatives dans les équations relatives aux formations de capital fixe privé aussi bien qu’aux changements dans les inventaires non-agricoles. On a introduit également comme variable l’indice de l’utilisation de la capacité, qui fut calculé d’après les indices des secteurs de production, en utilisant la méthode Wharton School. En abordant systématiquement le problème d’une évaluation quantitative de la politique économique nationale, tout en se basant sur un modèle économétrique, on se sert des trois techniques suivantes: 1. analyse du multiplicateur, 2. expériments simulés, 3. épreuve de praticabilité (feasibility test). Les résultats de l’application de ces techniques sont présentés et, finalement, les résultats de l’épreuve de praticabilité sont discutés.

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Resumen Una evaluaci?n cuantitativa de la política económica. El caso del Japón. — El objetivo del presente ensayo consiste en presentar los resultados provisionales de un anál isis cuantitativo de la política económica del Japón, realizado por medio de un modelo de prognóstico a corto plazo. En primer lugar, se introdujo el mecanismo de la espiral salario-precio en el sistema de ecuaciones. A continuatión, se escribieron ecuaciones de identidad con precios tanto corrientes como constantes, para facilitar, en vista de que la mayória de las variables de la política económica viene expresada en precios corrientes, la realización de experimentos pol’tico-económicos. Luego, se introdujeron como variables clave para experimentos politico-económicos y como variables explicativas de la formatión de capital fijo privado y de las fluctuaciones en los stocks no agrarios, el tipo medio de interés para créditos de la banca comercial, que queda regulado por la tasa de descuento del Banco de Japón, así como la relación anual entre las operaciones corrientes de la balanza de pagos y el producto nacional bruto. Además, se introdujo como variable el indice de utilización de la capacidad productiva, que se calculó por el método de la ?Wharton School?, partiendo de indices de producción sectorales. La aproximacíón sistemática al problema de evaluación cuantitativa de la política económica se efectúa a través de un modelo, en el que se emplean très métodos, a saber: 1. el análisis del multiplicador, 2. experimentos de simulación, y 3. una prueba de viabilidad (feasibility test). Se presentan los resultados de estos métodos y se discuten, finalmente, los resultados del ?feasibility test?.

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Riassunto Una valutazione quantitativa delia politica economica. Il caso Giappone. — Lo scopo del presente saggio consiste nel presentare i risultati provvisori di un’analisi quantitativa della politica economica per il Giappone che furono ricavati da un modello per una previsione economica a breve termine. In un primo momento fu introdotto nelle equazioni un meccanismo spirale salari-prezzi. In secondo luogo furono poste equazioni d’identità tanto nei prezzi correnti che nei valori reali per facilitare esperimenti politici orientati in senso politico-economico; infatti la maggior parte delle variabili della politica econ?mica sono espressi in prezzi correnti. In terzo luogo furono presi in considerazione i tassi medi d’interesse per crediti di tutte le banche commerciali i quali sono regolati mediante il tasso di sconto della Banca del Giappone, altrettanto come la relazione annuale tra le partite correnti della bilancia di pagamento per il reddito nazionale lordo come variabile chiave per esperimenti politico-economici e furono introdotti come variabile esplicativa nelle equazioni tanto per la formazione di capitale d’investimento privato che per le fiuttuàzioni nel magazzinaggio non agricole Inoltre fu introdotta la variabile indice di capacità di utilizzazione che si formò dagli indici settoriali di produzione mediante l’applicazione del metodo Wharton-School. L’avvicinamento sistematico al problema della valutazione quantitativa della politica economica si basa su un modello economico che impiega i tre seguenti metodi: 1) l’analisi moltiplicatrice, 2) esperimenti di simulazione e 3) un test di eseguibilità (feasibility test). I risultati di questi metodi sono descritti ed alla fine sono discussi i risultati del ?feasibility test?.

     

The impact of basic and social infrastructure investment on South African economic growth and development

Basic and social infrastructure investment can assist in addressing widespread inequality and divided societies by promoting economic growth and social development. The aim of this study is to determine whether basic and social infrastructure investment differently affect economic growth and social development indicators of urban and rural municipalities. We used a balanced panel dataset containing infrastructure, economic, demographic and social indicators for rural and urban municipalities for the period from 1996 to 2012. Principal component analysis was used to construct synthetic indices of basic and social infrastructure. Restricted within least squares dummy variable estimation techniques are used to evaluate the differences between urban and rural municipalities. The elasticities of basic and social infrastructure investment generally are more pronounced for economic growth and social development indicators in rural municipalities. These findings could potentially influence policy decisions in terms of infrastructure investment in favour of rural municipalities to increase economic growth and social development.     

The role for competition policy in economic development: the South African experience

Competition policy is part of the new international orthodoxy in economic policy and, at the same time, was viewed in South Africa as a crucial element of economic transformation. This article reviews the role of competition policy in economic development and the experiences of developing countries such as Brazil and South Korea. It then assesses the effects of competition policy in South Africa after 1994, with the main focus being on the performance of the new competition institutions established in 1999. The case of the steel industry is used to assess the approach and impact of the institutions in a concentrated sector that has simultaneously undergone processes of liberalisation and domestic consolidation.     

Politics as an environmental factor in population development: reviewing the South African situation

The political factors that affect the development of a successful population policy in South Africa are examined. "It is concluded that despite the important role of socioeconomic development, the success of the population development programme ultimately depends upon (a) the actual distribution of political power to all communities; (b) the degree of legitimacy enjoyed by the government among the broader population; and (c) a general political consensus regarding the urgency for curbing the population growth rate."     

Sources of successful cost recovery for water: Evidence from a national survey of South African municipalities

This article analyses variation in municipal cost recovery for water services in South Africa. It uses original data from a national survey of municipalities, conducted in late 2000. A multivariate causal model is estimated to measure the effects of social and institutional context, service infrastructure, and billing and payment practices. The analysis shows that cost-recovery outcomes vary widely and are quite sensitive to factors that can be influenced by municipal decision-makers. Substantive implications for a typical South African municipality are clarified through simulations of the effects of upgrading infrastructure, introducing various cost-recovery measures, and extending basic services to poor households. As profound changes in the institutional and policy environment--including municipal restructuring (demarcation) and the 'free basic water' policy--force municipalities to review their cost-recovery strategies, the article offers insights into how to achieve the best possible outcomes.