Financial systems and economic growth in South Africa: a dynamic complementarity test

This study examines the relationship between banks, stock markets and economic growth in South Africa. The study attempts to answer one critical question: are stock markets and banks complementary to one another in the process of enhancing economic growth? The complementarity between the stock markets and banks is examined by including a set of interactive terms in a standard growth model, alongside bank development and stock market development proxies. In order to test the robustness of the results, three proxies of stock market development have been used, namely stock market capitalization, stock market traded value and stock market turnover – against the ratio of bank credit to the private sector, a proxy for bank-based financial development. The economic growth is, however, proxied by real GDP per capita. Using the ARDL-Bounds testing procedure, the study finds that the complementarity between stock market development and bank-based financial development is weak and sensitive to the proxy used to measure stock market development.     

Commentary. Stuck in low GEAR? Macroeconomic policy in South Africa, 1996-98

Despite its ideology while in opposition, once in power theANC government implemented an orthodox macroeconomic policywhich stressed deficit reduction and a tight monetary policy,combined with trade liberalisation. The stated purpose of thispackage (the Growth, Employment, and Redistribution programme,or GEAR) was to increase economic growth, with a 4.2% rate programmedfor 1996-2000. At mid-term of the programme, growth remainedfar below this target. The GEAR's lack of success cannot beexplained by unfavourable external factors; rather, the disappointingperformance seemed the result of fiscal contraction and excessivelyhigh interest rates.     

Occupational segregation by race in South Africa after apartheid

This paper investigates progress in reducing the high level of racial stratification of occupations after apartheid in South Africa. Empirical analysis, using census microdata and Labour Force Surveys, does not provide compelling evidence of sustained or significant desegregation. Occupations remain highly segmented by race, with blacks disproportionally holding low‐paying jobs (compared with whites), although segregation and segmentation also affect in a different way the other population groups (Indians/Asians and Coloureds). Less than a third of the occupational segregation and about half of the segmentation of Africans (with respect to whites) are related to their characteristics, especially their lower educational achievement, a gap that has been reduced over time. Segregation and stratification, however, remain when blacks and whites with similar characteristics are compared.     

Public infrastructure provision and ethnic favouritism: Evidence from South Africa

Does coethnicity with the President affect public infrastructure provision in South Africa? Using municipal-level data for 52 district municipalities from 1996 to 2016, we find that municipalities coethnic with the President are associated with higher water infrastructure provision relative to non-coethnic municipalities. Taking into account various political considerations, results show that ethnic favouritism occurs due to ethnic altruism. Our findings remain robust to different specifications of coethnicity thresholds and are applicable to electricity infrastructure provision. Results suggest that in order to minimise ethnic favouritism, politically independent institutions should oversee the allocation of funding and provision of infrastructure.     

Assessing equitable health financing for universal health coverage: a case study of South Africa

This article argues that an assessment of progressivity over time can provide an indication of progress towards a ‘more’ progressive or a ‘less’ regressive health financing system and can be useful to policymakers. It introduces a framework to characterize ‘shifts’ in progressivity in health financing between two time periods using the popularly known Kakwani index of progressivity and other associated indices. It also decomposes the ‘shifts’ in progressivity into the relative contributions of the changes in income distribution and the changes in the distribution of health payments. Further, it proposes graphics that statistically analyses how the ‘shifts’ in progressivity vary along the distribution of income. A pro-poor (pro-rich) shift implies that the health financing mechanism is becoming more (less) progressive or less (more) regressive between two time periods. A proportional shift means that progressivity is constant between the two periods. This framework is applied to nationally representative household data from South Africa. It emerged that such characterization is a very useful tool for policy in assessing progress towards equitable health financing.     

Indirect Taxation and Gender Equity: Evidence from South Africa

Abstract

This study adds to the growing literature on the distributional effects of indirect or consumption taxes in developing countries by exploring whether these taxes have differential gender outcomes. Using data from Statistics South Africa's 2000 Income and Expenditure Survey, the study investigates differences in tax incidence between “female-type” and “male-type” households, classified according to their demographic and economic attributes. The results suggest that zero-rating a well-targeted selection of basic foodstuffs and fuel for household use is important in protecting female-type households, especially those in the lowest quintiles and with children, from bearing an otherwise disproportionate share of the tax burden. In contrast, high taxes on alcohol, tobacco, and fuel for private transport result in a larger incidence on male-type households. The study also suggests ways in which the indirect tax structure could be refined to further reduce the large gender (and income) inequities that exist in South Africa.     

The role of monetary policy credibility in explaining the decline in exchange rate pass-through in South Africa

This paper investigates the key factors that explain the documented decline in the exchange rate pass-through in South Africa over the past two decades. The paper finds that this outcome is largely due to improved monetary policy credibility. The South African Reserve Bank has become more credible since the adoption of the inflation target regime through improved communication, transparency, and independence. We show that credibility is enhanced through a gradual disinflation process and reduction of inflation volatility. As result, expectations of agents have become well-anchored at levels that are consistent with its objectives of keeping inflation within the official target range of 3–6 percent even in the presence of external shocks. This in turn reduces the exchange rate pass-through. This finding is important from a monetary policy perspective not only for South Africa but other emerging economies such as Turkey as it shows that improving monetary policy credibility is a key ingredient to reducing exchange rate pass-through.     

Why has unemployment risen in the New South Africa?1

We document the rise in unemployment in South Africa since the transition in 1994. We describe how changes in labour supply interacted with stagnant labour demand to produce unemployment rates that peaked between 2001 and 2003. Meanwhile, compositional changes in employment at the sectoral level widened the gap between the skill‐level of the employed and the unemployed. Using nationally representative panel data, we show that stable unemployment rates mask high individual‐level transition rates in labour market status. Our analysis highlights several key constraints to addressing unemployment in South Africa. We conclude that unemployment is near equilibrium levels and is unlikely to self‐correct without policy intervention.     

Conspicuous consumption and “race”: Evidence from South Africa

A century ago, Thorstein Veblen introduced socially contingent consumption into the economic literature. This paper complements the scarce empirical literature by testing his conjecture on South African household data and finds that Black and Coloured households spend relatively more on visible consumption than comparable White households. Following the approach of Charles et al. (2009), this paper explores whether the differences in visible expenditures can be explained with a signaling model of status seeking. Moreover, it is assessed to which extent positional concerns motivate conspicuous consumption. Although the socially contingent share in visible consumption increases with income, different incentives to consume conspicuously seem to explain that, at every level of income, Black households spend relatively more on visible consumption than comparable White households. In contrast to the findings of Charles et al. (2009) where differential spending on conspicuous consumption can be found also within each group separately, the model's core hypothesis fails to hold within the group of White South Africans.     

Competition and productivity growth in South Africa

This article shows that mark‐ups are significantly higher in South African manufacturing industries than they are in corresponding industries worldwide. We test for the consequences of this low‐level of product market competition on productivity growth. The results of the paper are that high mark‐ups have a large negative impact on productivity growth in South African manufacturing industry. Our results are robust to three different data sources, two alternative measures of productivity growth, and three distinct measures of the mark‐up. Controlling for potential endogeneity of regressors does not eliminate the findings.     

The Political Economy of Energy Transitions: The Case of South Africa

This paper explores the political economy of energy transition in South Africa. An economic model based around a powerful ‘minerals-energy complex’ that has previously been able to provide domestic and foreign capital with cheap and plentiful coal-generated electricity is no longer economically or environmentally sustainable. The paper analyses the struggle over competing energy visions, infrastructures and political agendas in order to generate insights into the governance and financing of clean energy transitions in South Africa. It provides both a rich empirical account of key policy developments aimed at enabling such a transition and provides reflections on how best to theorise the contested politics of energy transitions.     

The political economy of high-tech industries in developing countries: aerospace in Brazil, Indonesia and South Africa

This paper explores the dynamics of high-tech industrialisationin three emerging countries with sub-regional power ambitionsin the peculiar case of aerospace. The focus of the analysisis on the interaction between economic and political factors,at both the domestic and the international levels. The three(initially) state-owned firms show diverging fortunes that reflectdifferences in the ability to align the ownership structureto the financial requirements of technological upgrading, toadopt modern management practices, to participate actively inthe internationalisation of global supply chains, and to garnerthe support of domestic interest groups.     

南非政府科研资助战略 服务于知识经济建设

本文介绍分析了南非国家研究基金会2008—2015年愿景（战略规划）。今后7年，南政府科研资助将实现从需求驱动型向战略推动型的功能性重大转变，以促进本国向知识经济转型。值得我们借鉴的如建设具备国际竞争力的科技创新体系、保持世界级的科研工作声誉和经费资助体系、加强前沿科技和创新平台建设等方面。     

非洲建构自主发展动力体系的新探索——南非本土知识国家战略述评

南非本土知识国家战略系统提出发展本土知识的价值纲领，并从国家教育、创新系统，政府管理机构和运行机制，政策和法律调整框架，人力资源发展和能力建设，信息和研究机构建设等方面，阐明南非发展本土知识的方向和措施，对促进科技创新、知识创新，具有突出的现实意义。同时，就国家层面管理本土知识而言，南非本土知识国家战略是非洲面向新世纪积极建构自主发展动力体系的新探索，将对非洲的发展产生深远的影响。     

A cost function analysis of import demand and growth in South Africa

This study investigates the substitutability relationships among capital, labor, and imported inputs for South Africa, utilizing the estimates obtained from an aggregate cost function. Our results are consistent with the hypothesis that capital is a substitute for both domestic labor and imports, but that labor and imports are complementary inputs. This latter result suggests that relaxing South African trade restrictions may have a positive impact, in both the long and the short run, on the demand for domestic labor. Other results suggest that the reduction of market impediments may also positively impact the production of investment goods and economic growth.     

南非国家公园资金保障机制及其对 中国的启示

建立完善的资金保障机制是国家公园运营管理的关 键,决定了国家公园保护目标能否实现。对南非国家公园资金 保障机制的形成原因、特点及其保护绩效进行梳理后发现,其 市场化特征显著,形成了以市场渠道为主、财政渠道与社会渠 道为补充的资金保障机制。在多元化资金支持下,南非国家公 园维持了较为完整的生态系统,为游客提供了高质量的服务, 为社区转型作出了贡献,但也存在生物多样性保护不力和环境 破坏的问题。根据中国国家公园试点情况,同时借鉴南非国家 公园资金保障机制的经验和教训,我国应根据国家公园建设阶 段的不同实行不同的资金模式;合理确定资金使用结构;在不 损害保护目标的前提下,开展特许经营、生态旅游业务。     

Industrial labour productivities and tariffs in South Africa

The analysis of the effect of tariffs for labour productivity faces the challenge of tariff policy endogeneity. Tariff policy is designed to promote economic development and the industrial sector tariff structure may reflect characteristics of the industries protected. We seek to identify the effect of tariffs by taking advantage of multilateral tariff liberalization using reductions in industrial sector tariffs in other world regions as instruments for sectoral tariff reductions in South Africa. The data cover 28 manufacturing sectors over the period 1988–2003. We find that tariff reductions have stimulated labour productivity when instrumented by multilateral tariffs. The ordinary least‐squares estimates show downward bias and this confirms the endogeneity of tariffs. Investigation of channels of effects shows some support for the importance of competitive pressure and technology spillover from trade liberalization.     

Basel II procyclicality: The case of South Africa

This paper studies the impact of bank capital regulation on business cycle fluctuations. In particular, we study the procyclical nature of Basel II claimed in the literature. To do so, we adopt the Bernanke et al. (1999) “financial accelerator” model (BGG), to which we augment a banking sector. We first study the impact of a negative shock to entrepreneurs' net worth and a positive monetary policy shock on business cycle fluctuations. We then look at the impact of a negative net worth shock on business cycle fluctuations when the minimum capital requirement increases from 8 percent to 12 percent. Our comparison studies between the augmented BGG model with Basel I bank regulation and the one with Basel II bank regulation suggest that, in the presence of credit market frictions and bank capital regulation, the liquidity premium effect further amplifies the financial accelerator effect through the external finance premium channel, which, in turn, contributes to the amplification of Basel II procyclicality. Moreover, under Basel II bank regulation, in response to a negative net worth shock, the liquidity premium and the external finance premium rise much more if the minimum bank capital requirement increases, which, in turn, amplify the response of real variables. Finally, small adjustments in monetary policy can result in stronger response in the real economy, in the presence of Basel II bank regulation in particular, which is undesirable.     

南非基础研究经费投入格局和近期出台的计划与举措

2014年5月南非新一届内阁成立,其新任科技部长宣布将在未来5年内实现RD占GDP比重为1.5%的目标,显示出南非科技投入将进入一个新的历史阶段。南非基础研究投入一直处于稳步增长态势,其政府是主要投入力量。近年来,南非针对基础研究出台了一系列的相关战略、计划与措施,如:加大对大科学计划的支持;出台了生物经济战略;加强对科学基础设施建设的规划;扩大卓越中心建设,提升基础研发能力;大力吸引科技人才,加强科研领军人才队伍建设等。期望通过对南非基础研究投入的发展和格局变化的介绍,以及对南非政府出台的相关政策措施的分析研究,对我国依靠创新驱动和提高基础研究能力具有一定的借鉴意义。     

A comparative review of the pharmacoeconomic guidelines in South Africa

Objective: To compare the pharmacoeconomic guidelines in South Africa (SA) with other middle- and high-income countries.

Methods: A comparative review of key features of the pharmacoeconomic guidelines in SA was undertaken using the Comparative Table of Pharmacoeconomic Guidelines developed by the International Society of Pharmacoeconomics and Outcomes Research, and published country-level pharmacoeconomics guidelines. A random sample of guidelines in high- and middle-income countries were analyzed if data on all key features were available. Key features of the pharmacoeconomic guidelines in SA were compared with those in other countries, and divergent features were identified and elaborated.

Results: Five upper middle-income countries (Brazil, Colombia, Cuba, Malaysia, and Mexico), one lower middle-income country (Egypt), and six high-income countries (Germany, Ireland, Norway, Portugal, Taiwan, and the Netherlands) were analyzed. The pharmacoeconomic guidelines in SA differ in important areas when compared with other countries. In SA, the study perspective and costs are limited to private health-insurance companies, complex modelling is discouraged and models require pre-approval, equity issues are not explicitly stated, a budget impact analysis is not required, and pharmacoeconomic submissions are voluntary.

Conclusions: Future updates to the pharmacoeconomic guidelines in SA may include a societal perspective with limitations, incentivize complex and transparent models, and integrate equity issues. The pharmacoeconomic guidelines could be improved by addressing conflicting objectives with policies on National Health Insurance, incentivize private health insurance companies to disclose reimbursement data, and require the inclusion of a budget impact analysis in all pharmacoeconomic submissions. Further research is also needed on the impact of mandatory pharmacoeconomic submissions in middle-income countries.